'The Rachel Maddow Show' for Wednesday, December 10th, 2014

THE RACHEL MADDOW SHOW
December 10, 2014

Guest: Sheldon Whitehouse, Elizabeth Warren


RACHEL MADDOW, MSNBC HOST: As a Red Sox fan, it still hurts. So,
thanks for rubbing it in.

(CROSSTALK)

CHRIS HAYES, "ALL IN" HOST: -- on the case.

MADDOW: All right, I quit.

No, I`m back. Hello. That`s not what this job`s about at all. All
right. Thanks, Chris.

Thanks to you at home for joining us for the next hour.

The president of Afghanistan held a press conference today to announce
that he had been up all night. He told reporters in Kabul today at a press
conference that he had stayed up all night last night reading the U.S.
Senate report on the CIA torture program during the George W. Bush
administration. The president of Afghanistan said he was astounded by the
revelations in the report and he wanted the Afghan people to be assured
that that era was over.

And then, what followed immediately was the news that the last
American prison in Afghanistan was closed today. Bagram is a big U.S.
military base outside Kabul where U.S. forces have been based for well over
a decade now. That facility has included a prison, but the day after the
U.S. Senate published its torture report, that prison at Bagram got shut
down.

Now, in order to close that prison, the U.S. had to hand over to the
Afghans anybody who we were still holding there at Bagram, and it turns out
one of the people we were still holding there was a guy who had a starring
role in the torture report. So, Bagram`s a big air base, it`s never been a
secret that the U.S. military operated not just a base but also a prison
there.

But in addition to overt facilities like that, the U.S. also ran
secret prisons in Afghanistan basically from the very beginning, including
one that was known as the dark prison or the salt pit. In the Senate
torture report that`s just come out, this facility is called Cobalt.

Turns out that the very first prisoner who the CIA ever held and
tortured at Cobalt is this guy who was still in U.S. custody as of
yesterday who only got handed over to the Afghans yesterday on the day that
the torture report came out. This is from the torture report. It names
him as the first CIA detainee to be held at detention site Cobalt since he
was brought there in September 2002, the way the CIA tortured and
interrogated him there included isolation, and total darkness, lowering the
quality of his food, keeping him at an uncomfortable cold temperature,
playing music 24 hours a day, keeping him shackled and hooded.

In addition, he was described as having been left hanging, which
involved handcuffing one or both of his wrists to an overhead bar which
would not allow him to lower his arms for 22 hours each day for two
consecutive days in order to break his resistance. It`s also noted that
the person who observed him in these conditions and reported back described
him as wearing a diaper and having no access to toilet facilities.

So, they basically hung him from a bar hanging from the ceiling for 22
hours a day, let him urinate and defecate on himself while he kept him in
very cold conditions, bombarded him with music, kept him in the complete
dark, otherwise kept him shackled and hooded, fed him purposefully in a way
that was designed not to just feed him but to contribute to the effort to
break him.

He was the first one that we held at Cobalt, at that salt pit prison.
And his detention and interrogation there, according to this Senate torture
report, quote, "became the model for handling other CIA detainees at that
same prison."

That same prison eventually held more than half of the men the CIA put
through this torture and detention program.

But think about that for a second, we were hanging them from the
ceiling in 2002. We still had him in custody as of yesterday. Yesterday,
as this report came out and as the new Afghan president said he stayed up
all night reading and as they prepared the announcement that the last
American prison in Afghanistan would be closed down, yesterday, Afghanistan
finally got this guy back.

It`s one thing to talk about learning from the past. This stuff isn`t
even over yet. Yesterday, we learned all this detail about the torture of
Abu Zubaydah.

People who tried to justify the way Abu Zubaydah got treated will
often cite this ticking time bomb scenario, right. This apocryphal case
where a time bomb is ticking and the guy that knows where it`s going to go
off, you have to torture him in order to get information out of him
quickly. You have to torture people because you have to get them to talk
fast.

Well, Abu Zubaydah, part of his torture was that they put him in total
confinement for 47 days before they ever asked him a single question, in
order to soften him up. So, apparently, they didn`t think whatever he had
to say was all that urgent.

After 47 days of zero human contact, zero questioning, he went
straight into 17 days of torture, including waterboarding him over 80
times. We now have all this incredible detail about how they treated Abu
Zubaydah. It`s harrowing reading that case.

But it is not a historical case. Abu Zubaydah still right now is in
U.S. custody. He`s still ours, still a guest of the U.S. taxpayers
currently residing at Guantanamo.

These guys are still around. These things the still exist. The
consequences of how you can`t put them on trial, and how you maybe could
try to put them on trial but then you couldn`t use anything -- I mean, all
of that is still current news. They`re still in our custody.

Today, everybody and their mother had an exclusive interview with Jim
Mitchell. There he is, one of the Air Force psychologists who the Senate
says had no experience in interrogations whatsoever but the CIA
nevertheless tapped him to essentially come up with torture techniques for
its interrogations. The "A.P." had an interview with him today, "Reuters"
had an interview with him today, Vice News had an interview with him today,
the Penny Saver, your local church bulletin, everybody got an exclusive
today with this guy.

But yes, there he is, unavoidable for comment. Still around, living
off the millions of dollar, the tens of million of dollars the taxpayers
paid him for services developing this program and he`s all over the media
today making the case that when you`re waterboarding people is a helpful
thing when you`re trying to get information out of them. It`s an
interrogation tool. Why would you deny yourself a useful tool?

The issue of whether or not torturing people on purpose is the policy
of the U.S. government is not a question that was settled in the past.
It`s still an open question. I mean, the people who executed the policy,
who came up with the details of how to do it are still free, have
apparently been granted some sort of legal immunity. They`re still making
the argument this was a wise thing to the U.S. to do, we ought to keep
doing it.

In politics right now, half the political spectrum is arguing overtly,
this week, right now, that when we did torture people in the past, it`s not
only nothing to be ashamed of, it was not only legal, it worked, because
torture works. Torture produces great, useful information that you can`t
get any other way. It`s efficient. It keeps us safe. We should not only
be embarrassed that we did it before. We would be irresponsible if we
didn`t keep doing it in the future.

(BEGIN VIDEO CLIPS)

SEN. SAXBY CHAMBLISS (R), GEORGIA: The CIA`s detention and
interrogation program was effective and produced valuable and actionable
intelligence.

UNIDENTIFIED MALE: The question is were these technique effective?
The report concludes they were not. There`s abundant evidence that they
were.

RICHARD CHENEY, FORMER VICE PRESIDENT: I think that what needed to be
done was done. I think we were perfectly justified in doing it and I`d do
it again in a minute.

KARL ROVE, FORMER SENIOR ADVISOR TO GEORGE W. BUSH: But we do need to
remind the American people, the vast majority of whom are not part of the
hard left, that these techniques worked for a dark moment in our country to
keep our country safe.

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: When you roll up some of
these guys, you`re very anxious to get out of them whatever you can to
prevent the next attack. I understand why people did this.

NICOLLE WALLACE, FORMER BUSH COMMUNICATIONS DIRECTOR: I pray to God
that until the end of time, we do whatever we have to do to find out what`s
happened, and the notion that this somehow makes America less great is
asinine and dangerous.

UNIDENTIFIED MALE: I celebrate what the CIA did in the aftermath of
9/11. The CIA came forward and they aggressively interrogated, legally,
aggressively interrogated some bad guys and they got good some intel that
led to the capture of Osama bin Laden. Why are we apologizing for it?

(END VIDEO CLIPS)

MADDOW: That`s not old tape. That`s a snapshot of Republican and
conservative politics on this subject right now. That`s a wide variety of
Republicans and conservatives you just saw there. That`s not like a rump,
you know, group of defenders of this issue and everybody else is over it,
no.

This is not a settled issue. This is not the past. If Congress were
asked right now to create a brand new policy as to whether or not it should
be the policy and practice of the U.S. government to methodically torture
prisoners, I would bet that Congress would say yes. I mean, it`s arguable,
but it would at least be close, and I think it would probably pass.

And when Barack Obama is no longer president, there is no reason to
think that the next president, particularly if it`s a Republican, is going
to keep in place President Obama`s executive order that says we don`t do
torture as a policy anymore.

Live issue for the presidential primaries this upcoming year. Will
you as a commander-in-chief order U.S. personnel to torture people, do you
thing torture works? Is torture something we should take off the table,
even if we need it to keep the country safe?

I mean, open question right now for the presidential primaries. We`re
not out of this business yet. And there`s two things that are about to
happen that will show that. The first is something that`s going to happen
on Friday.

On Friday, the Obama administration`s facing a deadline in court. By
Friday, they have to tell a federal judge why they think each of more than
2,000 photographs should not be released to the public. They need a
separate explanation for each individual photograph and there are more than
2,000 of them. The photographs show prisoners in U.S. military custody in
Iraq and Afghanistan, prisoners reportedly being mistreated and/or tortured
during the Bush administration.

We`ve known about these photographs for a long time. When President
Obama first took office, Robert Gibbs announced from the podium in the
White House briefing room that the new Obama administration had no
objections to these photos being released, but they would therefore
probably soon be made public.

Shortly thereafter, though, President Obama himself announced that he
had changed his mind about those photographs, and instead his
administration would fight to keep them secret. This has been wrangled
over in court ever since. But Friday, the day after tomorrow, this judge
is demanding a case by case, picture by picture justification from the
government for why these things can`t come out.

Spencer Ackerman reported for "The Guardian" newspaper today. These
photographs, I should tell you, have not leaked. So, nobody is able to
describe them in reporting, but according to what Spencer Ackerman has
turned up, the photos are, quote, "said to be even more disturbing than the
infamous Abu Ghraib photographs that sparked a global furor in 2004."

So, are we done with torture? Are we proud of ourselves for being
willing to admit what we`ve done and finally be open about it? That`s not
even settled. Stay tuned. Friday`s the next chapter in that.

And, and this is a difficult one -- are we done with this in terms of
people who are currently serving in the U.S. government? The CIA cooked up
its torture program under President George W. Bush.

Today, though, in what may be his final speech as a United States
senator, Colorado Democrat Mark Udall took to the floor of the Senate and
said one of the ways this whole thing is not over is that some of the
people who knew about it, who were part of it, who made it happen, who did
it themselves are still serving in government right now. He made the case
today that the Obama administration, President Obama specifically, should
purge those people out of government office right now.

(BEGIN VIDEO CLIP)

SEN. MARK UDALL (D), COLORADO: Those who criticized the committee`s
study for overly focusing on the past should understand that its findings
directly relate to how the CIA operates today. Torture just didn`t happen
after all. Contrary to the president`s recent statement, we didn`t torture
some folks. Real actual people engaged in torture.

Some of these people are still employed by the CIA and the U.S.
government. They are right now people serving in high level positions at
the agency who approved, directed or committed acts related to the CIA`s
detention and interrogation program.

It`s bad enough not to prosecute these officials, but to reward or
promote them, and risk the integrity of the U.S. government to protect them
is incomprehensible. The president needs to purge his administration of
high level officials who are instrumental to the development and running of
this program.

(END VIDEO CLIP)

MADDOW: Colorado Senator Mark Udall is a member of the U.S. Senate
Intelligence Committee that released the report yesterday.

Senator Sheldon Whitehouse of Rhode Island was on the committee as
well when it voted to undertake this investigation and started on this
report.

Senator Sheldon Whitehouse of Rhode Island joins us now live.

Senator Whitehouse, good to see you. Thanks for being here.

SEN. SHELDON WHITEHOUSE (D), RHODE ISLAND: Good to see you.

MADDOW: So, what Senator Udall alleged there, what he claimed today
on the Senate floor is hard to hear, particularly if one of the silver
linings, it feels like, is that we`re finally owning up to this and making
sure it`s in the past and we`re willing to describe what happened. Is he
right that there are people who are implicated in this program that are
still working in high level positions?

WHITEHOUSE: Yes.

MADDOW: High enough that the White House should fire them?

WHITEHOUSE: The purpose of the report was never to cause personnel
action. The purpose of the report was to chronicle what happened and to
correct the two misperceptions that were being put out it wasn`t as bad as
all that, and that it produced results.

Coincidentally, it happened to produce information we were not aware
of, that it was the executive branch as well as Congress that was lied to
or deceived about the program. But I think to focus on individuals takes
you into a place where you`ve really got to bring in so much other
circumstance about what they knew, what they believed, what their role was.

If somebody was told that the attorney general of the United States
had said that this was legal and that their boss had said this was
essential to the national security of the United States and they did not
know better, that`s a very different set of facts than somebody who was
involved in trying to cover up the fact that the office of legal counsel
opinions were bogus and trying to suppress and order the destruction of
other memos that countered them. So, it`s just too hard to get into it
case by case in my view without a lot more detail.

MADDOW: It is at the same time difficult, I think it`s difficult to
explain in what sense torture is illegal once it`s documented to this
extent but nobody has ever been fired for it, let alone prosecuted for it.
I mean, there`s a case that the only person who has ever faced any legal
ramifications for torture in this country is John Kiriakou, who fashions
himself as a whistleblower on this subject. He`s the only person who`s
ever been prosecuted in any relation to this.

WHITEHOUSE: If you look to history we prosecuted U.S. military
soldiers for waterboarding people during the Philippines insurgency. We
prosecuted Japanese soldiers and I believe executed some for waterboarding
Americans during World War II, and we prosecuted and jailed a Texas sheriff
for waterboarding detainees back in the Reagan administration.

So, there`s some track record of doing it. It`s not that prosecuting
is wrong. It`s that you can`t make a decision about who the target should
be without looking in detail into individual cases.

MADDOW: The other thing that this report did d not do is make
recommendations for U.S. government change, whether or not it was personnel
specific, didn`t make policy change recommendations or ways to avoid
something like this happening again in the absence of individual personal
accountability.

Why are there no recommendations like that?

WHITEHOUSE: We wanted to get the story out. We wanted to make sure
that it wasn`t lost to history and scrubbed and we wanted to correct the
misimpression that this was relatively mild. I can remember hearing on
testimony that this was -- waterboarding was the kind of technique that
once you applied it, then you just got everything. It was unpleasant, but
it was done.

So, the idea that somebody had to be waterboarded 80 or 180 times
completely inconsistent with what we were told. Then you mentioned Abu
Zubaydah earlier. He`s the living proof of the fact that they have been
deceitful about how that torture program contributed to getting evidence
from him.

As you know, you`ve had Ali Soufan, the FBI agent who was in charge of
this, on your show. That all came out before they brought in the torturer
--

MADDOW: Right, he provided useful information under FBI techniques
which were not coercive. They started torturing him thereafter and got
nothing else useful from him.

WHITEHOUSE: So, what the Cheneys, and the Haydens and other people
will say is, the torture program -- I should say that the interrogation
program got this evidence out. But what they don`t distinguish is the
legitimate interrogation done by FBI and CIA professionals and this ham-
handed, amateurish contractor run torture program which did not.

MADDOW: Senator Sheldon Whitehouse of Rhode Island, I find you to be
a very clear speaker on these issues, and I always really appreciate
talking about these things. Thanks, sir.

WHITEHOUSE: Good to be on your show.

MADDOW: It`s good to see you again. Thank you.

WHITEHOUSE: Thank you.

MADDOW: All right. We`ve got a lot more ahead tonight, including my
other Senate guest tonight who is Elizabeth Warren. And that`s just ahead.

Please stay with us.

(COMMERCIAL BREAK)

MADDOW: Christmas 1998. One of the hot sellers for the holiday
season Christmas 1998 was this book. You can now buy it used online for a
penny, but at the time it came out, it was a really hot seller. The
official report of the independent counsel investigation into President
Clinton`s extramarital affair, "The Starr Report".

It was posted online in full on September 11th, 1998, but within a
week, they had it out in the form of a paperback book. And within another
couple weeks after that, it was in paperback in another separate edition.
"The Starr Report" sold like hot cakes that year.

Then there was also "The 9/11 Commission Report". That was priced at
10 bucks for the paperback. It sold more than a million copies.
Literally, it went to the top of the best-seller list and still sells well
tonight. "The 9/11 Commission Report" was nominated for the National Book
Award the year that it came out in 2004.

Well, now, it`s happening again. A New York publisher called Melville
House has announced that it will publish the Senate`s torture report that
came out yesterday. They`re going to publish it as a 480-page long book.

Now, this content, of course, is in the public domain. Anybody can
get it free online. But Melville House is betting there`s enough interest
in the torture report that people will want to have it in book form. Their
initial print run for this thing is 50,000 copies.

We`ll be right back.

(COMMERCIAL BREAK)

MADDOW: This was Harvard Medical School today. Look, dozens -- look
at this -- dozens of medical students and faculty and staff gathered in
their white coats while holding signs that said homicide is a public health
concern. They laid still for 15 1/2 minutes. They said they picked that
number because it was 11 minutes for the 11 times that Eric Garner told
police in Staten Island, I can`t breathe, and 4 1/2 minutes to represent
the 4 1/2 hours that the body of Michael Brown laid in the street after a
police officer shot and killed him this summer. Again, Harvard Medical
School today.

This was UC-San Francisco Medical School today. Medical students at
UCSF laying down outside the school`s library today.

At Loyola University in Chicago, the med student there staged their
die-in at the Christmas tree.

These were all part of a national protest. More than 70 medical
schools, medical schools, across the country making the case that the
criminal justice problem we have in our country of the police killing
people is on the scale now of a public health crisis.

So, today at med schools all across the country, hundreds and hundreds
and hundreds of medical students and doctors held these die-ins in many
cases with the blessings of their school dean and professors. They`ve been
tracking their silent protests with the #whitecoatsforblacklives.

This was the Washington University School of Medicine in St. Louis
today.

This was the University of North Carolina where medical students
marched out of the school in their white coats.

This was the UCLA Medical School today.

At Yale, in New Haven, Connecticut, about 70 medical students and
faculty laid down in front of the Sterling Hall of Medicine today.

At Johns Hopkins Medical School in Baltimore, this was the scene.

At Mt. Sinai in New York, over a hundred deans and doctors and medical
students joined the protest.

What began weeks ago as a reaction to police killings in Ferguson,
Missouri, and in New York City has become a movement now that really seems
to pop up everywhere. And today, I think to many people`s surprise, where
it popped up was at the nation`s most prestigious medical schools as a
political statement about the mission of being a doctor.

Well, now get this -- tomorrow, African-American staffers on Capitol
Hill are also planning a protest, a walkout, midday tomorrow on the steps
of the U.S. Capitol.

Watch this space.

(COMMERCIAL BREAK)

MADDOW: Contrary to rumors, I`ve not moved into a poinsettia farm.
I`m actually in Washington, D.C., where Republicans in Congress say they`ve
reached a deal to keep the lights on. They have a spending bill in hand
that they think can pass so they can avoid another government shutdown.

But tucked inside that gigantic new bill is a brand new, heretofore
secret, last-minute bailout provision for the biggest banks on Wall Street.

High profile Democratic Senator Elizabeth Warren railed against this
today on the Senate floor, and now that bill to keep the lights on might
not keep the lights on anymore. Right in the middle of this late breaking
fight, Elizabeth Warren joins us for an exclusive interview, next.

(BEGIN VIDEO CLIP)

SEN. ELIZABETH WARREN (D), MASSACHUSETTS: While this legal change
could pose serious risks to our entire economy, it will also make a lot of
money for Wall Street banks.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

MADDOW: Meet Rio Tinto. Rio Tinto is a big British and Australian-
owned mining company. It`s not to be confused with the beloved TV doggy
Rin Tin Tin. Nor with the cartoon boy journalist Tintin. It`s not Tintin
or Rin Tin Tin or Diamond Rio or the Tin Man.

Rio Tinto. Rio -- Rio Tinto. Hard to remember, easy to say. Rio
Tinto, one of the world`s largest mining companies. They employ more than
60,000 people around the world. Their focus is on, in their word, quote,
"finding, mining and processing the earth`s mineral resources to maximize
value for our shareholders."

Rio Tinto has hit a couple of PR snags in recent years on its way to
maximizing value for their shareholders. Por ejemplo, Rio Tinto decided at
one point that it was OK to let Iran hold an ownership stake in a uranium
mine. Iran. Uranium.

Rio Tinto was warned that doing that kind of business with Iran at one
of its mines might be against U.S. law, but they did it anyway because why
would anybody worry about Iran having access to uranium? What could
possibly go wrong?

But that`s Rio Tinto. And Rio Tinto is the company that Congress has
decided should get a big Christmas present this year from the people of the
United States. Congress has decided also that this Christmas present from
us to the giant mining company should be basically kept secret or at least
as secret as it gets in Washington, which means their gift to Rio Tinto has
been buried deep in a big, dense, totally unrelated piece of legislation.

Buried inside the 1,600-page-long defense bill, the bill that provides
funding to the entire Department of Defense is one little part called
Southeast Arizona Land Exchange and Conservation. And in that obscure part
of the defense bill, the House of Representatives has decided to allow Rio
Tinto -- a Rio Tinto subsidiary to mine for copper on an ancient and sacred
Native American burial ground that`s often called "Apache Leap". Apache
Leap got that name because it`s where Apache warriors who had been forced
to the edge of this cliff by U.S. forces, they chose to leap to their
deaths rather than be taken captive.

It is a sacred site for some Native American groups in this country.
They still use that site in areas around it for ceremonial purposes. But
now, instead, the Congress is planning to give that land to Rio Tinto, to
the mining company that did the uranium deal with Iran.

So, surprise! That`s in the defense bill. Taking Apache Leap and all
that land away from the Indians so it can become a giant copper mine
instead, just what we need.

There`s, actually, sort of a lot of public outcry over that as people
start to learn that secret. There`s now a petition at the White House Web
site with 60,000 signatures on it, urging this stripping out of the defense
bill before it moves forward.

So, that`s one little example of Congress trying to hide controversial
stuff deep in unrelated legislation. This happens every year and both
parties do it. But this year, with everybody`s attention even more
consumed by the torture report that was released yesterday -- I mean, just
as all the other must pass legislation has to pass in Washington this year,
with that happening at the same time as the torture report, this year, the
hiding stuff problem is off the hook, not just in the defense bill.

There`s also the matter of the giant budget bill that Congress has to
pass by tomorrow night in order to avoid yet another government shutdown.

This is the reception area at the office of Senate Majority Leader
Harry Reid in Washington today. These folks were not invited to this
reception area. They were protesters that staged a mini sit-in at Harry
Reid`s office today because included in that giant bill put forward by the
House Republicans is a provision that bans Washington, D.C. from enacting
its new law approved by 70 percent of D.C. voters, a new law that would
legalize pot in the District of Columbia, 70 percent of people living in
the D.C. voted to legalize pot in this past election, 70 percent.

But the House Republicans have quietly inserted into the bill that
funds the whole U.S. government a provision specifically to stop D.C. from
doing what 70 percent of the people who live here voted that they wanted to
do.

So, those protesters tonight are targeting Harry Reid to pressure the
Senate into not agreeing to that provision in the overall funding bill.
That whole funding bill we`re told is 1,603 pages long. I didn`t fact
check it. I didn`t print it out. There aren`t enough trees in the world.

But on page 1,599 of the bill, so three pages from the end of this
monster, they`ve also put in a measure that increases by a factor of ten
the amount that any individual person can contribute to the major political
parties. NBC News described that measure today as gutting what is left of
the McCain/Feingold campaign finance law.

So, with this, small donations really will mean nothing to anyone and
really only the richest people will be at all relevant to any part of the
political game. Certainly, just the change we needed.

Separate from all of that stuff, though, separate from all of those
examples is one measure that has resulted in a full blown uproar among
Democrats in both the House and the Senate. It is one measure that`s been
un-debated. It was a nice surprise tucked inexplicably into the big
spending bill, but there`s enough upset over it today and tonight that it
really does threaten to stop this bill dead in its tracks and bring us back
to the brink of shutdown.

After the financial crisis, Congress passed something called
Dodd/Frank, a set of regulations designed to keep anything like what
happened to the economy in 2008 from happening again.

One of those regulations said to the banks, hey, you know those
incredibly risky trades you were doing that almost made the economy implode
-- oh, that did make the economy implode, the federal government is not
going to ensure those trades anymore. You can do them yourself if you
want, but they`re not going to be insured by the taxpayers. You have to
keep those separate from the rest of your business.

House Republicans in the big budget bill they released last night
decided to take that rule change away. They decided to tell the banks
that, yes, the American taxpayers would be happy to once again underwrite
that kind of high risk trading. Taxpayers would love to be on the hook for
that again.

The House is set to vote on this legislation tomorrow. Democratic
leader in the House Nancy Pelosi says she wants this provision stripped out
of the bill. She said it in no uncertain terms.

Several Senate Democrats, including one of the newest members of the
Democratic leadership, Elizabeth Warren, railed against this provision on
the Senate floor tonight. Senator Warren passionately urging her House
colleagues to vote no on the bill if it holds this provision in it, to not
give the Republicans the votes they need to pass this thing. Not as long
as this thing is slipped into it.

(BEGIN VIDEO CLIP)

WARREN: The House is about to vote on a budget deal, a deal
negotiated behind closed doors that slips in a provision that would let
derivatives traders on Wall Street gamble with taxpayer money and get
bailed out by the government when their risky bets threaten to blow up our
financial system. These are the same banks that nearly broke the economy
in 2008 and destroyed millions of jobs, the same banks that got bailed out
by taxpayers and are now raking in record profits.

This is a democracy, and the American people didn`t elect us to stand
up for Citigroup. They elected us to stand up for all the people.

I urge my colleagues in the House, particularly my Democratic
colleagues whose votes are essential to moving this package forward, to
withhold support from it until this risky giveaway is removed from the
legislation. We all need to stand and fight this giveaway to the most
powerful banks in this country.

(END VIDEO CLIP)

MADDOW: Senator Elizabeth Warren today going there, making a dramatic
plea to House Democrats that they should not help the Republicans pass this
bill to keep the lights on. Not if it guts the laws that we pass to
protect ourselves from another financial collapse like the one we had in
2008.

Honestly, talking real politics without Democrats voting for this
thing, John Boehner can`t pass this bill. What happens if Democrats decide
they`re not going to help him do what he needs to do?

Joining us next to talk about this from the middle of this fight is
Senator Elizabeth Warren.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

WARREN: We put these rules in place after the collapse of the
financial system because we wanted to reduce the risk that reckless
gambling on Wall Street could ever again threaten jobs and livelihoods on
Main Street.

(END VIDEO CLIP)

MADDOW: Senator Elizabeth Warren today in the Senate giving a speech
in which she basically whipped Democrats in the House to not vote for the
government funding bill that Republicans have sent from the House unless a
last-minute provision relating to the big banks is taken out of that
funding bill.

Joining us now for the interview is Senator Elizabeth Warren of
Massachusetts.

Senator Warren, thanks very much for your time tonight.

WARREN: Thank you. It`s good to be here.

MADDOW: So, specifically, what`s your objection to this specific
provision in the budget bill, and did you know it was coming?

WARREN: So, let`s start with the second part. No, I did not know it
was coming. I don`t think anybody knew this was coming.

But what the Republicans did is they pushed a bunch of terrible
financial bills into the negotiations -- a lot of attacks on Dodd/Frank, on
the Consumer Financial Protection Bureau -- and the Democrats beat them
back, but this is the provision that stayed, and it is a real stinker.

What this one is about is that after the financial crash, we said to
these big financial institutions, you`ve got to take the riskiest part of
your trading, separate it out so that if it explodes, when it explodes,
it`s not going to take down the insured part of the business, the deposits
that are insured by FDIC insurance. And that provision has been in
Dodd/Frank all along. Everybody has adjusted to it.

But what happens now in the spending bill is they just repealed that
provision, which means that the taxpayers ultimately will be on the hook if
they get out there and engage in derivatives trading and it blows up the
entire financial institution or the entire economy.

You know, this is just one of those -- this is a basic safety and
soundness provision. And it only applies to just a handful of the biggest
financial institutions in this country. So, what`s really going on here?

Well, they can make more money if they can do all of this business
under the umbrella of their insured operations. They want the American
taxpayers to subsidize their risk taking. They`ll take all the profits
when it works and push the losses off on everyone else if it blows up.

MADDOW: The Republican lesson from the bailout, from the financial
crisis, at least on the very far right side of the Republican Party, was
supposedly that the bailouts were a bad idea, that the taxpayers getting
involved in trying to save any part of the economy is a bad thing, it`s
ideologically odious and that we should never do this again.

It`s hard -- I`m surprised that there is not an outcry on the right
about this, that the Tea Party caucus and others aren`t looking at this and
saying this a taxpayer giveaway that isn`t good for anybody other than
these lobbyists.

WARREN: No kidding. In fact, the title of the provision is no
bailouts. I mean, that`s what this is about.

So, every Republican and every Democrat who votes for the omnibus with
the repeal in it is voting to say, you know, we`re going to take out the
part that says no bailouts for derivatives trading. You think everybody
would say, we`re not doing this. We`re not doing this.

But do keep in mind, this was a provision that was written by
Citigroup lobbyists. I mean, they literally wrote it. They took it back,
they reedited it and made sure it said exactly what they wanted it to say.

The biggest financial institutions in this country can make more money
if this little provision gets stripped out of Dodd/Frank, and that`s why
we`re here to fight.

MADDOW: In terms of the practical and timely politics of this right
now, John Boehner knows that he`s going to have 10, 20, 30, 40, 50, 60
defections from his own side in trying to pass the government funding bill.
He knows he needs troops from the Democratic side, from Nancy Pelosi`s
troops on the Democratic side, in order to get this thing passed. Nancy
Pelosi has not said that she`s whipping against this and she wants
Democrats to get in line with her objections to this, but her objections to
this were loud and voiced very clearly today and repeatedly.

Do you think that this is -- or do you have indications that this call
that you`ve made and that Nancy Pelosi is now making will actually deprive
John Boehner of enough votes that this might stop the passage of the whole
bill?

WARREN: You know, I think this is about the leadership in the House.
But I think this is really about democracy. I think this is about getting
out and exposing what`s going on to the American people and that the
American people speaking up themselves saying we`re not going to put up
with this.

You know, I want to say to anybody who is watching this, I hope
they`ll go to elizabethwarren.com. We`ve put something up on our Web site
to say, sign on to tell the people in the House of Representatives we`re
not putting up with business like this where these terrible provisions get
crammed at the last minute into a bill that`s absolutely essential to keep
the government up and running. That is not how we should be doing business
in Washington.

And I think the folks in the House right now who have got the chance
to strip this provision out need to hear from the American people over it.
That`s -- that`s why I`m here tonight. And that`s what I`m going to keep
getting out there and fighting for.

Tomorrow morning, we`ll see what happens.

MADDOW: Senator Elizabeth Warren, thank you very much for your time
tonight. This is -- I have no idea how this is going to end. Thanks for
helping us understand your take on it. I appreciate it.

WARREN: Thank you.

MADDOW: It is -- the dynamic here that is unusual is that the
Republicans have put this in, right, the Republicans put this in. It was
never debated. Nobody had any warning this was coming. The Republicans
made sure this is in at the last minute.

And now, the Republicans need the Democrats to help them pass it in
order to get it through. They can`t get it on their own. Democrats just
have to decide if they`re going to help them do this.

I think Democrats have been looking for an excuse to not vote for this
thing and I think they just got it.

Stay with us.

(COMMERCIAL BREAK)

MADDOW: Most of time, it is perfectly OK for a speaker to do this in
a public forum. Hydrate, wet your whistle.

But when it is not OK to do this in a public forum, it can be kind of
a disaster. And this time it has nothing at all to do with Marco Rubio,
but it really is a disaster.

And that -- excuse me, that`s next. Stay with us.

(COMMERCIAL BREAK)

MADDOW: On Thursday morning, back in January, people in Charleston,
West Virginia, noticed a licoricey odor wafting through the streets. It
was coming from the banks of the Elk River. When investigators arrived at
that facility, they discovered that a chemical was leaking from the bottom
of storage tank number 396.

The company that owned that storage tank, Freedom Industries, having
yet reported the leak at the time, but investigators soon discovered that
about 7,000 gallons of this chemical had leaked from the tank right into
the Elk River, which happens to serve as the main water supply for about
300,000 people in nine different counties in the state of West Virginia.

This wasn`t just a few folks up in the hills. This was like the
population center in West Virginia that screwed up all of their water.
People were told not to drink their tap water, not to wash in it, not to
bathe in it.

Tests found a chemical in drinking fountains in the schools. People
had to line up at water distribution centers with tanks (INAUDIBLE).

A day and a half into that crisis, the president of the company with
the leaky tank gave a press conference for the ages. They will teach this
one in business school forever under the headline, "don`t do this".

Watch what the guy does specifically with the water bottle.

(BEGIN VIDEO CLIP)

GARY SOUTHERN, FREEDOM INDUSTRIES PRESIDENT: Look, guys. It`s been
an extremely long day. I`m having a hard -- trouble talking at the moment.
I would appreciate it if we could wrap this thing up. I will --

REPORTER: We have a lot of questions. This has been a long day for a
lot of people that don`t have water. So, can you give us an exact timeline
as to how these all happened? Are there no systems in place to alert you
of a leak at your facility other than a smell?

SOUTHERN: At this moment in time, I think that`s all we have time
for. So, thanks for coming. Thanks for your time.

REPORTER: We have more questions.

Hey, hey, hey. We`re not done.

SOUTHERN: You`re not done?

REPORTER: We`re not done, no.

Anyone else have any other questions?

REPORTER: How did the hole get in the bottom of the storage tank?
How was the material able to get out of the storage tank at all?

SOUTHERN: OK, it`s a steel storage tank, we don`t know the answer to
that. That`s one of the things we`re trying to determine.

(END VIDEO CLIP)

MADDOW: No idea how a hole ended up in the bottom of the tank and
polluted your drinking water, says the man who runs Freedom Industries, as
he chugs his clean bottled water and tells everyone how inconvenienced and
tired he is. Can I go now?

Next week with lawsuits piling up, the company declared bankruptcy and
the EPA and FBI started investigating. Among other thing, it`s a crime to
knowingly or negligently introduce pollutants into publicly owned water
systems.

Well, now, the big news is that the dude with the water bottle has
been arrested. Gary Southern from Freedom Industries was arrested on
Monday on criminal fraud charges, federal charges. The FBI alleging that
he repeatedly lied about his role in the company, basically to protect
himself from repercussions of the disaster.

The FBI says he told investigators he had little to do with daily
operations until shortly before the spill, claiming that until the month
before the spill, he only worked there as a part-time financial-type
consultant. You know, still trying to find the paper clips, because
wouldn`t you rather be a part-time employee rather than the boss of the
company that wrecked the drinking water for most of the state.

The FBI says Gary Southern actually became COO in 2009. He served on
its board from 2010 to 2013, and he managed the day to day operations at
that plant where they spilled the toxic chemical into the city water supply
even though he said he was just some part-time guy.

Gary Southern is now facing federal charges of bankruptcy fraud, wire
fraud and lying under oath if he was convicted. He`s looking at 30 years
in prison.

His lawyer tells us that Mr. Southern isn`t guilty. He says they`ll
fight the charges vigorously. He says Gary Southern has been unfairly
singled out.

That chemical that spilled incidentally, that toxic goo that poisoned
the water supply for most of West Virginia for days and weeks, that
chemical is a coal thing. It`s a chemical that they used to wash coal
after coal has been mined. And newly indicted and newly arrested Gary
Southern is not the only white-collar guy with coal connections who`s now
on the docket in West Virginia.

We think of West Virginia as a place where the coal industry gets to
do what it wants basically without consequences. But the U.S. attorney and
the federal prosecutor in that district seems to be on a bit of a tear at
the moment.

Last month, it was the same federal prosecutor who unveiled a four-
count indictment against this guy, the most famous coal baron in the
country, Don Blankenship, the same U.S. attorney charged him with knowingly
compromising safety measures at one of his mines in order to make more
profit, right up until the moment when that mine collapsed and killed 29
men.

Don Blankenship says he, too, isn`t guilty but his actions as a coal
mine executive are now the subject of that federal criminal case. That
same U.S. attorney is the one prosecuting this other --- this second
executive, Gary Southern, from the West Virginia coal chemical that same
U.S. attorney is the one prosecuting this second executive, Gary Southern,
from the West Virginia coal chemical drinking water disaster.

The U.S. attorney says the drinking water disaster investigation
continues. He expects more announcements soon. So, maybe there will be
even more arrests.

This is not how the coal industry expects to be treated by government
in West Virginia but who know a few more arrest, a few more part-time
felony indictments, maybe the expectations are start to charge.

Now, it`s time for "THE LAST WORD WITH LAWRENCE O`DONNELL".

Good evening, Lawrence.


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