updated 3/31/2014 11:13:22 AM ET 2014-03-31T15:13:22

THE RACHEL MADDOW SHOW
March 28, 2014

Guests: Matt Katz, Lucia Graves, Michael McFaul

ARI MELBER, GUEST HOST: Good evening. I know what I`m going to see
this weekend. Thanks, Alex.

And thanks to you at home for staying with us for the next hour.
Rachel has the night off.

And today was the biggest day in the ongoing bridge-gate scandal
surrounding Governor Chris Christie of New Jersey. We still do not know
why access lanes on the busiest bridge in the world were shut down,
gridlocking a small town in New Jersey on the orders of a senior member of
Governor Christie`s administration.

But today, we learned a lot more about what happened with a new
resignation, and tonight, a new response from one of Christie`s former
aides in the eye of the storm. The most striking part of today`s events
was how much of the events were actually carefully choreographed. Several
of these developments looked planned and well-coordinated with team
Christie excelling in their handling of all of them -- well, all except
one, a key development that broke late in the day today. And we`re going
to have more on that in a moment.

The theatrics began, however, with Chris Christie`s first press
conference, the first time he answered questions from journalists on the
bridge-gate scandal since that initial lengthy press conference he held
back in early January. That is when he first acknowledged publicly that
the order to close down access lanes on the world`s busiest bridge came
from his office. And that he was sad -- so sad that he used that word 17
times in that briefing.

Now, whatever happened in the intervening months, a different governor
came out swinging today.

(BEGIN VIDEO CLIP)

GOV. CHRIS CHRISTIE (R), NEW JERSEY: It`s nice that you eventually
got to the question, but the premise of the question is so infirmed that
I`m not answering it. It`s amusing to me when you guys like to write
stories about what you think you`re entitled to. What I think you`re
entitled to is the answers when I get them.

You know, seriously, I`m up here trying to very carefully answer your
questions. And I don`t know whether you can`t take notes or you`re not
listening, but for you to characterize my last answer as I didn`t want to
ask her because I didn`t want to know is so awful that it`s beneath the job
you hold. What I said was that I made --

(END VIDEO CLIP)

MELBER: Beneath the job you hold. That is coming from a man
discussing an internal investigation he was forced to commission after
several of his aides were found to be beneath their jobs and the first
thing that was evident in this new tone is that aggressive, even proud
Chris Christie is back. It was that confident Chris Christie boldly
asserting repeatedly that the facts were on his side.

When you hear about facts from Christie, today, he is citing the
assertions, allegations and conclusions of lawyers hired by his office in
their report. That new report as Rachel explained in detail last night
takes 300 pages to offer some very final thoughts after what it
acknowledges was a very partial set of interviews and documents. And it
argues the governor is now clear of any wrongdoing. That entire format led
to headlines like this. Chris Christie`s lawyers clear governor.

And today, Chris Christie came out vigorously defending that report.
He was eager to push back against the inevitable media scrutiny you get
when lawyers hired by your office say you`re innocent and that`s the end of
the story.

And even in this imagined victory lap, however, Christie had to leave
another key ally on the side of the road today. He announced the
resignation of probably the most powerful and senior person to be field
(ph) by this scandal so far, and he said it was basically business as
usual.

(BEGIN VIDEO CLIP)

CHRISTIE: I received a call from David Samson who informed me that
after reviewing the master report that he completely supports the
recommendations laid out for the Port Authority and that he believes the
best way to start a new era at the Port Authority is with new leadership.
In line with that belief, David tendered his resignation to me this
afternoon effective immediately. I want to thank him for his service and
his friendship. I look forward to discussing with Governor Cuomo, ushering
in a new era at the Port Authority in light of the recent events, past
history, and the recommendations laid out in the Mastro report.

(END VIDEO CLIP)

MELBER: That resignation of David Samson was big news.

It was also big news that the Christie administration was clearly
ready to handle, to choreograph, to announce and to explain. It`s not the
first time Samson has coordinated strategies with Christie beyond being his
top appointee of the Port Authority. He led the governor`s transition team
after his very first election as governor, a trusted role for an old friend
and mentor.

That`s also why it was awkward when David Samson`s name turned up in
the subpoenaed documents detailing bridge-gate when Christie`s aides, David
Wildstein and Bridget Kelly, discussed how, quote, "Samson was helping us
to retaliate" the claim at the time, was that Samson was in on the payback
against people at the Port Authority who were trying to stop that traffic
scheme. Scrutiny didn`t serve Samson well at the port, either, over these
past few months. As this became a national story, many journalists dug
into his potential conflicts of interest. He has two roles, one as a
powerful chair of the port which has a budget bigger than many states.

And yet, he also has this ongoing and lucrative career at a law firm
with clients that profit from New Jersey. Unlike other Christie aides,
Samson had stayed on the job through this scandal, though. He was in a
position to cooperate with the lawyers for the governor`s office. Those
lawyers we saw there on camera briefing yesterday. So, it was super double
awkward when their new report confirmed that Samson simply refused to
cooperate with or be interviewed for their investigation at all.

Just imagine the lawyers poring over all those documents and doing all
those interviews without ever having a chat with the guy at the top of the
Port Authority. It turns out that noncooperation was even more important
today, because even though David Samson couldn`t take the internal Christie
investigation seriously enough to cooperate with it, the Christie
administration now says he takes the investigative reports so seriously
it`s why he`s quitting.

Governor Christie has stood by David Samson from the moment this
scandal broke and he was ready, again, to do so today.

(BEGIN VIDEO CLIP)

CHRISTIE: I spoke to General Samson on January 8th and asked him what
he knew about this, if he had no involvement in it, if he authorized it.
Or had any idea of the planning of it or any of the rest. He said,
absolutely not.

And that rang true to me at the time not only because of David`s
reputation for honesty over the course of his entire career, but also
because the role of the chairman of the Port Authority is not an
operational role. This role is a policy role. And so, I wouldn`t expect
that David would be involved in any kind of day-to-day operational issue
like a traffic study at the Port Authority.

(BEGIN VIDEO CLIP)

MELBER: Governor Christie there today saying he believes David Samson
had zero involvement in any of this because David Samson has been in public
life for a long time. That was basically the assertion.

Governor Christie also made the case that Samson`s resignation
effective immediately was planned for and in the works for months.

(BEGIN VIDEO CLIP)

CHRISTIE: This comes as in great shock to me, Terry, because David
started talking to me a year ago about want to leave and the only reason he
stayed is because I asked him to. So, it didn`t come as a shock to me this
morning that he called and said it.

(BEGIN VIDEO CLIP)

MELBER: Now, that is classic political misdirection there, as if it
matters whether the governor was personally shocked. Obviously, it`s not
shocking if they discussed this plan for a long time.

The problem is with even all that time, the only public reason they`re
offering for Samson leaving doesn`t even make sense within their own story.
It raises questions as to why Samson, an accomplished former attorney
general, thought it`s safer to use that story line than talk to fellow
lawyers on team Christie about what happened.

As for the governor, today, he was ready for everything, for the
report, for that resignation, for the press questions. He had an answer
for everything -- everything until late this afternoon when we got this.
This is a statement from the attorney of Bridget Anne Kelly. Bridget Anne
Kelly is, of course, the person at the center of bridge-gate.

She`s Governor Christie`s former deputy chief of staff. She was the
person who sent the e-mail "time for some traffic problems." And she,
along with David Wildstein, is the person who`s essentially being blamed
for everything now. She was fired. She`s been called a liar by Governor
Christie and his attorneys. Governor Christie called her actions
inexplicably stupid. That`s a quote.

Her personal life has been dragged into the middle of all this by
those very lawyers that Chris Christie hired, his office hired, without
explaining why it could possibly be relevant to their investigation. In
their report exonerating governor, they wrote Bridget Kelly had a personal
relationship with Governor Christie`s former campaign manager. And that he
basically dumped her. They alluded to this multiple times in that report
out yesterday.

Making basically an indirect case that having that relationship end
might have led her to do what she did. And they came to these conclusions
again, we emphasize, without ever talking to Bridget Kelly or Bill Stepien.
And they made little mention of how ending that relationship might have
altered Bill Stepien`s state of mind.

They went out of their way to shine a light on a seemingly irrelevant
personal set of details about Bridget Kelly`s life. And today, for really
the first time throughout this entire scandal, Bridget Kelly`s lawyers came
back. They spoke out and spoke out hard calling this report venomous,
gratuitous, inappropriate, and sexist.

They made it very clear there are currently two versions of this
story, one that exonerates the governor and one that does not and Bridget
Kelly could clear this all up if she wanted to. Bridget Kelly`s attorneys
go on to say in this new letter we have here, as far as they`re concerned,
the only credible investigation into the lane closures is being conducted
by the U.S. attorney. They say she`ll cooperate with the U.S. attorney if
she is, quote, "offered procedural safeguards, legal protection to testify"
-- something that`s come up for many witnesses here.

Interestingly, perhaps tellingly, Bridget Anne Kelly`s lawyer writes
that she worked tirelessly to pursue the goals of Governor Christie`s
office when she worked there. Governor Christie seemed prepared for
everything today, even the resignation of one of his top appointees, all
the questions from the press, everything seemed perfectly timed.

But is the Christie administration prepared for this response from
Bridget Kelly, saying essentially that all she was doing was again pursuing
the goals of the Christie administration.

Is the Christie administration prepared from this potential bombshell
from someone formerly in their innermost circle? What happens next here?
Hold that thought. We`ll be right back.

(COMMERCIAL BREAK)

MELBER: After weeks spent back on his heel, New Jersey Governor Chris
Christie got back in full swing in the last 24 hours. That was all before
Bridget Kelly swung back early this evening.

It`s game on in New Jersey. Stay tuned.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

REPORTER: Governor, what do you think of the depiction of Bridget
Kelly in the report? There have been some remarks that not only did it
describe her actions, but it described her personal details about her life
and in very unflattering terms. I wanted to know if this was a person who
was very close to you at one time, do you think the report was fair to
here? What did you think of the descriptions?

CHRISTIE: I think the report laid out the facts as the investigators
found them, and however anybody wants to interpret those is up to your
particular interpretation.

(END VIDEO CLIP)

MELBER: That was Governor Chris Christie today deferring on the
question of whether the report that was put out on his behalf yesterday,
whether that delved too much into the personal life of his former deputy
chief of staff, Bridget Kelly. That report mentioned on multiple occasions
that Kelly was involved in a personal relationship with one of the other
key players in this whole saga, Governor Chris Christie`s former campaign
manager Bill Stepien. And the lawyers speculated in that report that maybe
Bridget Kelly`s personal life affected the decisions she ultimately made.

Today, a number of unnamed friends of Bridget Kelly told "The New York
Times" they believe those allegations in the report were sexist. Then this
evening, Bridget Kelly`s legal team came out after months of mostly silence
on this matter to make the same accusation. Her lawyers say, quote, "The
report is venomous, gratuitous, inappropriate sexist remarks concerning Ms.
Kelly have no place in what is alleged to be a professional and independent
report." That statement from Bridget Kelly`s lawyers suggested if granted
immunity by federal prosecutors, she would be ready to talk.

Joining us now is Matt Katz. He`s been covering Governor Christie for
WNYC News and New Jersey Public Radio.

Mr. Katz, thank you for being here on what is obviously a pretty
significant day in the evolution of this story and this set of
investigations.

First, your take on this new response from Bridget Kelly`s lawyers.

MATT KATZ, WNYC REPORTER: It`s in line with what we heard yesterday
from Bill Stepien`s lawyer. Bill Stepien is the other person in this
relationship that was essentially outed yet by this report. This is a
relationship that actually reporters in Trenton knew about.

We had heard these rumors for some time. We just weren`t quite sure
what the relevance was. I talked to some reporters today and they agree
with me that they knew about it but didn`t report it because we didn`t know
why it mattered necessarily in the larger story.

This is the point that the lawyers are making. Why does this matter?
Why is it relevant?

Bill Stepien`s lawyer yesterday, the campaign manager, he said he
thinks it was brought up and brought up in a very prominent place in the
report. It was in the fifth paragraph in this report. He thinks it was
brought up as fodder for the tabloids, that it was an effort to distract.
That, you know, they`ll be paying attention to the salacious stuff and not
the other details of the report. And sure enough today in the "New York
Post", this was the lead story.

So, you know, the report says, and Governor Christie said he agreed
with the report today and the lawyers who wrote the report say it was meant
to show that Kelly and Stepien were not talking at the time because she had
been dumped by him right before she wrote the "time for some traffic
problems in Fort Lee" e-mail.

But, you know, how do they know that? We`re not sure. How did they
know when exactly the relationship ended if they didn`t speak to the two
individuals involved? We don`t know.

MELBER: Right. And if they have in their voluminous report those
kind of assertions without the evidence, it raises not only how do they
know that, but whether they know that and whether this is a report that is
long on allegations presented as facts.

You`re describing, though, one particular rationale from one set of
lawyers. I want to be clear, though, that Bridget Kelly`s lawyers, what
they`re saying tonight is not only that it was some distraction or not
simply for tabloids, but rather that it was specifically designed to impugn
and isolate her as a potential witness.

KATZ: Right. And they actually said that and then made the argument
that, therefore, she needs immunity and protection so she can give whatever
information she has to the feds in exchange for protection from going to
prison, herself, for what she did. They`ve really separated her from
Stepien in this sense. And this was a way, it seems, of drawing a line
between the two.

Actually, I actually asked the governor today if he would hire Stepien
again. Remember, he got rid of him as his main political adviser. This
was the guy who was supposed to run his presidential campaign, we thought.
He`s the one in this relationship and I asked the governor today if it`s
possible that he could be brought back in the fold and maybe work for the
governor again.

And he didn`t say no. He said, I`m not entertaining hypotheticals.

And that was interesting to me because Kelly is clearly the one who`s
being, is shouldering the burden of the blame here and not Stepien.

MELBER: From your --

KATZ: And that was --

MELBER: Let me ask you, Matt, from your reporting, though, beyond
simply her desire for immunity, do you have any reason to believe that
there are other more senior people that she could give up which would be
the main reason a U.S. attorney`s office would be interested in granting
her immunity?

KATZ: She wrote an e-mail in August, three weeks before the lanes
were closed that said "time for some traffic problems in Fort Lee." We
don`t know what preceded that.

Something preceded that. It was a conversation. It was an e-mail.
Maybe it came from somebody below her. Maybe it came from somebody who`s
already been implicated. Maybe it came from somebody high up the food
chain. We don`t know.

But something preceded that e-mail and that`s the huge -- that is
essentially the biggest question here, because that was the smoking gun.
So what -- who fired that gun to mix up the allegory here, I mean, what
prompted that e-mail? We don`t know. That`s the information that she may
have that she could theoretically sell to the feds here.

MELBER: And in your reporting today, you mentioned your questions to
the governor. What was your take on him in the room? As we reported, he
definitely looked on TV different than the last time he held an extensive
press conference on this subject.

KATZ: It was totally different, and it was the old Chris Christie
that I`ve been covering for the last three or four years. He was
combative. He talked smack against reporters. He didn`t like questions
that had long preambles, which is a pet peeve of his at press conferences.
And this is something that in the last press conference, in the big mea
culpa press conference in January where he went on for two hours, he let
everything go.

He was very calm. He was contrite. He let reporters repeat a
question even if they`d already been asked earlier and didn`t get mad at
him.

That`s not the Chris Christie you saw today. You saw the old Chris
Christie. It seemed to me like it was the beginning of the comeback -- the
attempted comeback or the real comeback, what-have-you.

I mean, he`s now going back to who he was and he`s going to see what
happens. He did this press conference. He fought with reporters. And
tomorrow morning, he`s getting on a plane to Vegas where there`s a big
Republican meeting and he`s going to go woo some donors. It`s going to be
as if this never happened. So, he`s going to try the comeback. We`ll see
where it goes.

MELBER: Yes. That is what`s striking, especially politically. This
is clearly him saying, allow me to introduce myself. And yet to a lot of
eyes including experienced New Jersey reporter like yourself, it does look
like the old Chris Christie in many ways. That may be part of the message
he wants to convey.

Matt Katz from WNYC and New Jersey Public Radio -- thank you so much
for your time, spending time with us on Friday night.

KATZ: Any time. Thanks.

MELBER: Thank you.

National elections come down to this: which candidate will best
fulfill the needs and aspirations of billionaire casino owners? So what
are the aspirations of billionaire casino owners? That`s straight ahead.

(COMMERCIAL BREAK)

MELBER: And now, an update tonight on a story reported here Monday
about the jubilant weekend that same-sex couples had in Michigan during the
short-lived window where everyone in the state actually had a right to
marry. From late Friday, when the state`s ban on gay marriage was struck
down to the end of the day Saturday when the Republican state attorney
general got the stay that he requested.

Now, more than 300 gay couples had managed to get hitched including
one industrious Michigan couple who both got married and filed their joint
federal tax return during that window of equal rights last weekend.

On Wednesday, Republican Governor Rick Snyder told all 300-plus
couples they may have gotten married in Michigan but as far as the state of
Michigan is concerned, they`re not married. This same situation where
Republican governor is all but un-marrying married same-sex couples
happened in Utah, you may remember in December when 1,300 couples got
married before the equal rights window slammed shut in that state.

Now, in that case, the federal government weighed in to contradict
Utah`s governor directly announcing even though the state of Utah would not
recognize their unions, the federal government would.

Today, Attorney General Eric Holder, he did it again, issuing a
statement saying that all, all of the marriages performed in Michigan last
Saturday will be recognized by the federal government and that those
families will be eligible for all the federal benefits that come with being
a lawfully wedded couple. Lucky for that organized couple with their tax
returns.

Holder also tipped his hat today to the Supreme Court decision last
summer that struck down the federal gay marriage ban, calling it a historic
step towards equality for all, all American families and explaining his
decision today to recognize those 300 same-sex marriages in Michigan was
part of the DOJ`s steadfast commitment to realizing our country`s founding
ideals. Strong words from the top law enforcement officer in the nation.

Now, in the meantime, the path to marriage equality in the state still
goes through the federal court.

As Rachel would say: watch this space.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

CHRISTIE: I don`t know whether I`m having a private meeting with
Sheldon and Miriam or not. I haven`t looked at my schedule yet for
tomorrow.

(END VIDEO CLIP)

MELBER: That`s New Jersey Governor Chris Christie. He is going to
Las Vegas this weekend.

But he told reporters today what he was not sure about was whether he
would get a personal one-on-one with, yes, Sheldon and Miriam Adelson -- I
should say Sheldon and Miriam Adelson, the billionaire casino magnate and
his wife poured $92 million into super PACs during the 2012 election.
Sheldon Adelson clocks in at one of the richest people in the world with
$38 billion.

You may remember, back in 2012 when the press marveled at how
Republican presidential candidate Newt Gingrich vowed to stay in the race
and insisted he wouldn`t leave the field after losing major primaries.
Maybe he was dogged, and maybe he was really determined to see things
through.

But it didn`t hurt that he had a little financial boost courtesy of
Mr. Adelson and his wife. They poured $15 million into a pro-Gingrich
super PAC called Winning Our Future, which mainly went toward advertising,
a big assist at a time when the Gingrich campaign was very short on cash.

By late March, Adelson decided he lost faith in that candidate and
Newt Gingrich was at the end of his line. Soon after, Newt Gingrich
dropped out of the race and Adelson threw his support behind a Romney super
PAC, Restore Our Future, with twice the amount of money he gave to
Gingrich, because when you are worth $38 billion, $92 million of those is
just pocket change.

In fact, that amount would translate to the median U.S. household of a
donation of about 95 bucks -- which brings us back to this weekend. At
least four Republican governors, including Christie, are heading to Las
Vegas for a four-day-long conference sponsored by a lobbying entity called
the Republican Jewish Coalition. This is held at the Venetian Hotel, of
course, owned by Sheldon Adelson. He`ll be in attendance.

He`s reportedly on the lookout for a more mainstream electable
candidate this year. Those scheduled to address the coalition include
former Governor Jeb Bush, Governor Scott Walker, and Governor John Kasich
of Ohio, and, yes, Governor Chris Christie. Fresh off a two-day-long tour
of television screenings just about everywhere, touting what he says is, as
we`ve said, his exoneration in the bridge scandal courtesy of the lawyers
who would help his office navigate whether a criminal investigation into
the office might actually proceed.

And today, with regard to that Las Vegas trip, Governor Christie told
reporters he wasn`t sure he`d have the one-on-one meeting with Mr. Adelson,
although Las Vegas reporter Jon Ralston then tweeted out a source tells him
Christie definitely has that very meeting scheduled.

Mr. Adelson is a very rich man and he`s a casino man. The thing about
men who run casinos is they`re accustomed to winning, no matter what.

So, what can Sheldon Adelson win from a perspective candidate to whom
he might generously donate? What matters to him that might involve
politics and policy? Online gambling. That matters a lot to him. He`s
not a fan online gambling because he says it hurts casinos and gamblers.
Why go to a casino if you can gamble from home, right?

Adelson hates online gambling so much he launched something called a
coalition to stop internet gambling, which gained some traction in both
parties.

And earlier this week, Senator Lindsey Graham and Congressman Jason
Chaffetz just happened to introduce bipartisan legislation to fully ban
some online gambling. The bill was originally drafted with a lobbyist
working for Mr. Adelson. And three Republican governors have written to
lawmakers in recent weeks in support of a similar ban of online gambling.

Governor Bobby Jindal of Louisiana, Governor Nikki Haley of South
Carolina and Governor Rick Perry of Texas. This might pose a problem for
Governor Christie if he`s trying to impress Mr. Adelson this weekend
because last year the governor legalized internet gambling in his home
state of New Jersey.

But this is what matters to Sheldon Adelson right now. He might not
even pick candidate who wins the election the next time around. He didn`t
do that in 2012. But he has enough power and clout in one party to
influence political fights about federal legislation.

So, welcome to Vegas, Governors. Sheldon may not always pick the
winners in the race, but as a casino man, he knows how to run more than one
game at once. He can lose an election here and there, and still win the
battle for laws that boost his business interest. And in Vegas, you
already know this, the house always wins.

Joining us now is Lucia Graves, staff correspondent for "National
Journal."

Thank you for being here.

Talk to us first about how internet gambling became such a policy
priority for so many of these folks.

LUCIA GRAVES, NATIONAL JOURNAL: Well, I think you have to look at
Sheldon Adelson`s priorities and he -- you know, he`s always been staunchly
pro-Israel but he`s first and foremost a casino mogul and Internet gambling
is a threat to his brick and mortar business model. You know, if you can
gamble online, you might not bother to come to his casino.

And right now, there are two bills before Congress that would ban
Internet gambling and so he`s looking for a GOP contender to help him get
this legislation through and ultimately to help his bottom line.

MELBER: Right. You`ve written about this, and what`s so interesting,
to me, about it, looking at the history of campaign finance regulation, is
the Supreme Court has spoken very specifically in the precedent about the
appearance of impropriety. That is to say not only the idea that laws are
being bought, but that it`s a problem for our democracy if the citizenry
thinks there`s an appearance of impropriety.

This would seem to be exactly an example of that, whether or not you
can prove it`s a quid pro quo, there`s obviously a stampede to go at
Internet gambling in a way many of these Republican officials simply
haven`t ever cared about previously.

GRAVES: Yes, absolutely. I think it`s a perfect test case for how
big money can influence politics. Usually, it`s much more invisible. When
the Koch brothers give money, they go through a super PAC.

But Sheldon Adelson is willing to write a check to candidates he
supports, which is pretty unprecedented. It`s pretty transparent. It was
so funny, when I was writing this story, this was something that you can
read between the lines and know this is happening, but literally an hour
after I had filed my story, I heard that Rick Perry, who you know is
running for president, had written a letter to leaders in Congress trying
to ban Internet gambling.

Just, you know, he just happened to drop that this week.

MELBER: Right. And that the governor of Texas, you know, is
constantly lobbying Congress over Internet regulations.

What is the response here? What is the pushback to any of this?

GRAVES: The pushback from -- well, I mean, you can see why GOP
contenders are interested. Adelson is the biggest fish in the game. In
2012, he gave $20 million to Gingrich`s campaign and $100 million overall.
So, they can`t afford to ignore that money however tacky it looks.

MELBER: Right. So you don`t think there`s a much of a consequence
for them looking like they`re on the take, basically?

GRAVES: No. I think people don`t really care about Internet gambling
except for Sheldon Adelson. I think it`s really, really important to him.

For other politicians, it`s just not that big a deal, like Senator
Lindsey Graham who`s taken it up in the Senate. He`s never said a word
about Internet gambling before. And all of a sudden, he`s spearheading the
bill, and oh, Sheldon Adelson just happened to drop about $15,000 into
Graham`s re-election campaign because he`s up this year.

So things like that. Just no one cares as much as a casino mogul.

MELBER: Right. Right. Yes, there`s a bit of a mismatch there.
Lucia Graves, I know you`ve been reporting on this a lot from the "National
Journal" -- thanks for your time tonight.

GRAVES: Thanks for having me.

MELBER: And a pause now to consider weekend plans. I don`t have any,
clearly. I wonder what the Russian army has planned. That is an important
question. More on the future of that, coming up next.

(COMMERCIAL BREAK)

MELBER: President Obama spent much of this past week in Europe going
from meetings to summits, to even more meetings with our allies, with G7
and with a lot of leaders. That`s the president`s job. Even if sometimes
it can make even a cerebral commander in chief look down right bored.

And yesterday was a little different. The president went to the
Vatican to meet with the new pope, Pope Francis, for the very first time.
They talked longer than the planned schedule with a focus on inequality and
exchanged gifts.

The president gave Pope Francis a box made of reclaimed wood from one
of the oldest Catholic cathedrals built in the U.S. and he filled it with
seeds from the White House garden, one of the first lady`s major
initiatives. The pope`s gift was a leather-bound copy of his work, "The
Joy of the Gospels" along with medallions that symbolized peace and
solidarity. It may all sound largely symbolic but it`s different than the
last pope`s heavy handed recommended reading, a track wildly interpreted to
condemn stem cell research and abortion.

This new pope has made broad appeals for peace and freedom for the
people of Ukraine. A topic that all too quickly came up even before the
president left Italy for his next stop, Saudi Arabia. The president sat
for an interview where he talked about that elephant in the room.

(BEGIN VIDEO CLIP)

SCOTT PELLEY, CBS NEWS: What is Vladimir Putin after?

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Well, you know, if you
take him at his word that --

PELLEY: Can you?

OBAMA: Well, on this, I think he`s been willing to show a deeply held
grievance about what he considers to be the loss of the Soviet Union. He`s
said that he considers the breakup of Soviet Union to be tragic. I think
there`s a strong sense of Russian nationalism and a sense that somehow the
West has taken advantage of Russia in the past and that he wants to in some
fashion, you know, reverse that or make up for that.

Certainly, they`re going to have influence because of trade and
tradition and language and heritage with Ukraine. Everybody acknowledges
that, but there`s a difference between that and sending in troops, and
because you`re bigger and stronger, taking a piece of the country.

(END VIDEO CLIP)

MELBER: Let`s take that point there right to the map. Here is the
Soviet Union including Russia, the head of the union. As you can see, it`s
a huge block of land, a huge block of power. The fall of the Berlin Wall
broke that power into pieces, into this map today, after the breakup.

And while Russia asserts specific historic claims to Crimea, many
analysts believe this is not only about history, it`s about power today,
and Putin`s desire to reassert nationalistic power on today`s world map.
Putin may not stop at this piece of turf.

Today, we saw the prime minister of Moldova, another former piece of
that big block, appealing to the European Union, the U.S. and Russia with a
concern that Putin may try to annex part of its territory. Is Moldova
next? Is eastern Ukraine next?

And short of war, are there other actions the U.S. or the E.U. can
take to make that less likely? There has been political and media
speculation about whether Putin is more macho than President Obama. That
united parts of the GOP for a while, partly because personality based
critiques are easy and partly because it worked as a hypothetical complaint
before some of these harder choices were on the table.

Now, we`re hearing less of that for good reason. The regional tension
is escalating well beyond hypotheticals and well beyond the neo-
conservative fan fiction narrative that manly warnings are the antidote to
any and all authoritarian threats.

That`s probably good for our policymaking process because the U.S. is
returning to the most consequential national security question here. Is
Putin a movable actor? Is he grabbing a finite amount of land regardless
of what we do? Or is he deciding how much to invade in direct response to
the West`s action, or inaction?

There are a lot of intelligence reports and Security Council meetings
that basically boil back down to that question. It`s not like Putin wants
it to be crystal clear for us. He benefits from strategic ambiguity.

Today, he went on state TV and declared that taking Crimea proves
Russia`s military prowess, strength, and power as a nation. We`ve known
for some time the Russian troops have been amassing on the border of
Eastern Ukraine under the guise of so-called military exercises. We didn`t
know how many. But tonight, "The Wall Street Journal" is reporting there
are nearly 50,000 Russian troops on the border. And that sounds like a lot
of unilateral offense, not diplomacy.

Then late today, Putin called President Obama directly. The White
House is telling reporters the call was about a possible diplomatic
resolution. And the president urged the Russian leader to pull his troops
back from the border to deescalate the crisis and in the tradition of
"trust but verify", the White House released a summary relaying that,
quote, "President Obama suggested that Russia put a concrete response in
writing and the president agreed that Kerry and Lavrov would need to
discuss next steps."

They spoke for about an hour and at the end, there was no indication
that either side was will to give yet, agreeing to let chief diplomats
tackle the matter again soon.

So, what next? Here you have Russian troops amassing on the border of
Ukraine. No one wants to meet that with an immediate military option. On
the other hand, how many more acts of aggression by Russia until things
change significantly? How much more until we or the West are concerned
enough to make them stop if necessary?

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

Mr. McFaul, as always, thank you for joining us. Walk us through,
first, how to interpret what we`re reporting as conflicting messages here
coming from Putin and the Kremlin?

AMB. MICHAEL MCFAUL, FORMER AMBASSADOR TO RUSSIA: Well, they`re
conflicting, but I think it`s designed to create leverage over a
negotiation that he wants. That is to say, he`s massed these troops. It`s
very ominous, very scary to me that those troops are there.

But then the phone calls to say, let`s negotiate, what he means is
let`s negotiate about eastern Ukraine. Let`s negotiate about Ukrainian
federalism. Let`s negotiate about protections of Russians inside Ukraine.
Let`s not negotiate about Crimea.

And so, I see this as a classic -- now that I`ve taken that part,
that`s nonnegotiable, let`s negotiate about the new terrain on his terms.

MELBER: And so, if you sort of put nationalistic ego aside, and your
view is somewhat positive because it means that there are off-ramps? And
also, what did you think of the president, your former boss, trying to give
some sort of nuance reflection of Putin`s historical claims here?

MCFAUL: Fundamentally, I don`t like it because Putin is changing the
debate. Just remember, just for the last several days and weeks, we were
talking about Crimea. Now, he`s threatening eastern Ukraine and, say,
let`s have a diplomatic solution to my threat to eastern Ukraine.

It`s a little absurd to me, like, why -- what`s the negotiation about?
Isn`t that the sovereign territory of Ukraine? Why should Russia have a
say in what happens on the other side of those borders?

So, I think it`s a typical bullying threat to change the subject to
say Crimea is a fait accompli, you need to accept that. Now, I`m going to
threaten here. It`s time for you to negotiate on my terms.

MELBER: And then, on that point -- I mean, it`s well put or somewhat
ominous or at least concerning, though. Does that give credence to what we
might call the rational actor or neoconservative critique or concern that
he is testing and because he hasn`t been met strong enough, he will
continue to test and try to take more?

MCFAUL: I think that`s right. He can test. It`s very cost-free,
right? If he doesn`t do anything.

Of course, moving into eastern Ukraine with Russian troops is a very
costly act, much more costly than going into Crimea, first and foremost
because eastern Ukraine is not neatly divided between Russians and
Ukrainians. The Russians live in the big cities. The Ukrainians live
around those big cities. And I think there will be conflict. I think
there`ll be fighting, guerrilla warfare, even if not conventional warfare.

And second to his credit, I do believe my old boss, President Obama,
did raise the stakes by threatening sectoral sanctions -- sanctions against
Russian enterprises and businesses if there`s further escalation of
violence.

So, those are things that Putin has to think about. Those are not
things that he thought about when he moved into Crimea.

MELBER: Understood. Ambassador, walk us through the relatively
narrow statement we are getting from the White House from the idea that
there would be some diplomatic discussions proceeding out of the today`s
phone call.

MCFAUL: I think, you know, it`s always better to negotiate than not.
It`s good to have those channels of communications and I admire the
president for talking to Putin directly, because after all, he`s the main
decision maker. But from afar, not knowing the details of what`s been
proposed, I am a little perplexed about what is the so-called diplomatic
solution that we`re talking about.

If it doesn`t include the withdrawal of Russian troops from Crimea, I
don`t like the terms we`re setting up for this negotiation. It seems to me
that all the leverage is on Putin`s side, not on our side.

MELBER: Understood. Michael McFaul, former U.S. ambassador to
Russia, thank you very much for helping us make some sense of it tonight.

MCFAUL: Thanks for having me.

MELBER: Absolutely.

MCFAUL: It is getting to the point where if your state hasn`t had an
oil spill lately, that is news in and of itself. We have all the slimy
polluting details you need to know, straight ahead.

(COMMERCIAL BREAK)

MELBER: The Grand Staircase-Escalante National Monument is gorgeous
and vast. It`s two million acres dominate southern Utah and remain
remarkably undisturbed. Half a million people visit this national park
every year. Yet, its natural wonders remain about as unexplored as when
they were originally mapped by a teenage explorer back in 1872 who
discovered the very last unknown river, the Escalante, and the last unknown
mountain range in this U.S., United States.

Since the area is so vast and untouched, people continue to make
discoveries on the land. This past Saturday, in fact, a few hikers made a
discovery of their own, while exploring the area adjacent to the Escalante
River. The hikers fund a jet black substance coating the sandstone walls
of the valley wash and like any good explorer or tourist, they snapped some
pics.

And these revealed a four-mile long oil slick running all the way down
to the wash that leads to the Escalante. It probably came from the oil
field west to the river, and the upper valley. The Citation Oil and Gas
Corporation has run an old oil field there. In the 2012, the company was
cited for a broken pipe that was seeping oil.

We talked to some state officials and they said they sent a team which
found there is a spill and it`s old, very old. It could date back as far
as 1971. They believe it wasn`t noticed for decades, but recent flooding
brought the oil back to the surface. And they`re figuring out how to do
some overdue clean up in the area. That`s the scene in Utah.

Our environmental tour continues in Indiana where this Monday, around
4:30 in the afternoon, workers at a local tar sands oil refinery reported
an oil sheen developed on Lake Michigan next to the plant. BP later
confirmed that a slug of crude oil had been released from their year-old
refinery, dumping oil directly into the great lake.

As everyone in Chicago knows, it`s not only important that lake
Michigan be nice to look at, it`s important that it remain clean enough to
drink. It is the source of drinking water for about 7 million people
there. And that half mile spill was only eight miles from one of the
city`s water intakes.

According to initial estimates, there were 500 gallons of crude oil
spilled. Today, BP had to more than double that estimate, now saying they
spilled upwards of 1,600 gallons of oil into the main source of drinking
water for the third most populous city in the country. That is big news,
even if it hasn`t gotten much national coverage yet.

And our environmental tour continues in Ohio.

(BEGIN VIDEO CLIP)

REPORTER: These are the first images of the oil spill taken by the
EPA. Those who live near the nature preserve could smell it for days
before they saw it.

UNIDENTIFIED MALE: It was quite strong this morning. And a
helicopter starts flying over, you know, continually around and around and
around.

REPORTER: First responders tracked the smell and discovered 10,000
gallons of crude oil leaking in the wetlands of the Oakland Nature
Preserve. The spill came from a 20-inch ruptured pipeline, running from
Texas to Michigan.

(END VIDEO CLIP)

MELBER: That leak was spotted just half an hour outside of Cincinnati
on Monday. At about 8:00 p.m., when a local resident was just driving
nearby and then smelled what he described as a fuel oily smell, so he got
out of his car, spotted oil coating on the marsh there, called 911 and then
told the dispatcher, it`s absolute terrible. It made me sick when I saw
it.

Pollution can be very sickening. Thousands of gallons of crude
spilled just 500 feet from the Great Miami River which receivers as a
source of drinking water, again a theme here, for a huge swath of the
state, including Dayton and Cincinnati.

This week, the EPA said the clean-up will be tricky. They`re trying
to vacuum up as much of the oil as possible and removing what is often
known as a soup that gathers around the spill. From these photos you can
see here released by the EPA of the clean-up, you can sort of see it. You
see they`re mopping up the oil with something that`s sort of like an
industrial paper towel.

So here we have a spill that they originally said was 10,000 gallons.
The amount of oil that drained directly into the protected wet lands had to
be adjusted. Up. Way up. Doubling their original estimate, not 10,000,
but 20,000 gallons had leaked into the nature preserve`s marsh.

This makes the third spill in this area coming from a 1,000-mile
pipeline owned by Sunoco in the 40th incident involving the 50-year-old
long pipelines, stretching the length from Texas to Michigan.

While news about these spills in Utah and Lake Michigan and Ohio were
limited for now to the pages of local papers, they`re becoming sort of a
daily occurrence. And one day, it`s nearly 200,000 gallons in the
Galveston Bay and other 20,000 into a nature preserve in Ohio, all becoming
just par for the course, the increasingly petroleum fouled course.

All right. That does it for us tonight. I want you to know Rachel
will be back on Monday.

If you want to find me, you can find me on Twitter @Ari Melber.

And as Rachel would say -- you guys, it`s time to go to prison. Good
night.

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

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