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'The Rachel Maddow Show' for Thursday, December 18th, 2014

Read the transcript to the Thursday show

THE RACHEL MADDOW SHOW
December 18, 2014

Guest: Jason Healey, Michael McFaul


RACHEL MADDOW, MSNBC HOST: Good evening, Harry. Thanks a lot, man. And
thanks to you at home for joining us this hour. Apparently, the theme in
today`s news is that we live in a lurid, insider world of covert action,
anonymous attacks, untraceable bad guys, spies and secret international
finagling. It is the season. Today, we learned that this is the spy who
President Obama thanked and praised yesterday in his address to the nation.
Even though the president didn`t name him in that speech.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES OF AMERICA: Cuba today
released one of the most important intelligence agents that the United
States has ever had in Cuba and who has been in prison for nearly two
decades. This man whose sacrifice has been known to only a few, provided
America with the information that allowed us to arrest the network of Cuban
agents that included the men transferred to Cuba today, as well as other
spies in the United States. This man is now safely on our shores.

(END VIDEO CLIP)

MADDOW: The president did not say this man`s name. But there just aren`t
that many people in the world who would fit the description that the
president gave. It seems like the Spanish language edition of "The Miami
Herald" newspaper was first to guess, first to report out that the
President, the man who President Obama was talking about and praising in
his speech, was flown out of Cuba after nearly 20 years in jail. It seems
like the Spanish language version of "The Herald" was first to report that
that man was this man, Rolando Sarraff Trujillo. This "Herald" his name
out first, as far as we can tell, in a lot of other publications filled in
with further reporting. Supporting the idea that it was him, and
ultimately, U.S. officials confirmed that this is the guy. This is the
super-spy who President Obama traded for. The man who if U.S. credits with
wrapping up not one, not two, but three major Cuban spying plots inside the
United States. Mr. Sarraff apparently worked on the cryptology section of
Cuba`s Directory of intelligence. As Cuba national, he worked in the Cuban
intelligence director. He was an expert on the codes that Cuban spies in
the United States used to communicate back home to Havana.

For example, one of the things that we know about this woman, Ana Montes,
who`s described as one of the most damaging spies in American history, one
of the things we know about her case is that she specifically used a
Toshiba laptop computer to compose the encoded messages that she sent back
to her handlers in Havana. When she was sending U.S. secrets back to Cuba,
she sent them using this specific laptop.

Part of the way the FBI and then ultimately, the Pentagon caught her, is
that they had been tipped off, somehow, to that specific fact about her.
To the fact that this spy who had access to high level information inside
the Pentagon, was specifically using a Toshiba laptop computer to make
those communications back to Cuba.

So, when investigators realized they had a mole in the Pentagon, they did
all fashioned detective work to narrow down the list of suspects, right,
looking at who had access to the kind of information that was being sent to
Cuba. They tried to narrow down the list of suspects. When it came time
to pinpoint the actual individual, they were able to do it, in part,
because they got financial records that showed that Ana Montes, senior
intelligence official at the Defense Intelligence Agency, Ana Montes had
taken out a line of credit at a CompUSA store and then they were
specifically able to figure out that the reason she took out the line of
credit at a CompUSA store was to buy a Toshiba laptop computer. They got a
warrant, they snuck into her house, they found the Toshiba laptop, they go
through it, bingo, she turns out to be the spy.

Now we know that that initial kernel of data that led to her, well, we
don`t know, but now we can connect the dots, right? Somebody working in
the Intelligence Directorate in Cuba who was an expert in the coded
messages that Cuba spies in the United States used to send the American
secrets home, that would be the kind of person who might notice a detail
like what kind of computer that suspect -- excuse me, that spy was using to
send home that information. This spy, the super damaging spy was sending
home her massages on a Toshiba laptop. And that information is credited
with wrapping up Ana Montes at the Pentagon. This spy is also credited
with leads that led to Kendall Myers at the State Department. He spied for
Cuba from inside the U.S. State Department for nearly 30 years. This Cuban
spy - sorry, this guy who was just freed from Cuba, is also credited with
the information that led to a huge network of Cuban spies operating inside
the Cuban exile community in south Florida.

So he worked in the Cuban Directorate of Intelligence. Cuba apparently,
caught him, figured out what he was doing in 1995. They convicted him of
espionage. Apparently, he was committing espionage for the United States.
They sentenced him to 25 years. President Obama got him out as of
yesterday and flown to the United States. His family in Cuba spoke to
reporters today saying they have no idea where he is. We are told that
he`s somewhere in the United States. Nobody has seen him yet publicly, but
now we know a lot more about the spies and the subterfuge that led to this
big announcement about this big change in Cuban policy yesterday.

We also know a lot more about how the deal came together. Apparently, very
shortly after he was re-elected and started his second term, in early 2013,
President Obama personally authorized a new, fresh overture (ph) to the
Cuban government.

At the end of his first term, when Hillary Clinton was living a secretary
of State, she apparently had written a memo to the Obama White House
suggesting a new effort to try to normalize relations with Cuba and to try
to get rid of the embargo. President Obama did start that effort secretly
at the very beginning of his second term. But it`s interesting. He chose
not to go through the State Department. He chose not to go through the
sort of proper diplomatic channels in order to make this overture.
Instead, what he decided to do was go outside the State Department, outside
normal, overt diplomatic channels. And, instead, this negotiation happened
basically, directly, from one president`s office to another. Basically
from President Obama`s office to Raul Castro`s office. Presidency to
presidency. President Obama tapped these two guys, Ben Rhodes, Deputy
National Security advisor and Ricardo Zuniga, from the National Security
Council.

And, in secret, they were the two who made this overture to the Cuban
government and started these talks. They started a weird travel schedule
where the two of them would fly to Ottawa or sometimes to Toronto, they
flew commercial, so it wouldn`t seem like they were there doing any
official government business. Cuban officials from their president`s
office would then also fly up to Canada in a low profile super-secret way
to engage in these meetings. The Canadian government hosted seven of these
meetings. And again, further - further interest here. Look, and the
Canadians were hosting all of these talks. They were having them happen on
Canadian soil, they were helping keep them secret. But the Canadian
government itself did not participate in the talks at all. So it was in
Canada, but it was just the U.S. and Cuba. A very small number of very
high-ranking presidential advisors on each side.

The only other entity that was involved at all was the pope. President
Obama, you might remember, he went to the Vatican to meet with Pope Francis
last March. Apparently, one of the things they talked about there in some
detail, was the American relationship with Cuba. "The New York Times
describes it today as President Obama briefing Pope Francis "in a one-on-
one meeting over a spare desk adorned with a gold crucifix at the Vatican."
So the pope apparently followed up this one on one briefing from President
Obama with personal letters that he wrote both to the White House and to
Raul Castro asking both men to keep pushing to get their governments to
come to some kind of agreement.

Meanwhile, the two sides, the two negotiators, kept secretly meeting in
Canada over this year and a half long effort. Finally, the deal about
swapping the spies and freeing Alan Gross, this USA aide guy who`d been in
jail since 2009, the final deal on the spy swap and the prisoner releases
happens at the Vatican just two months ago. It happened in October. They
apparently had one more logistics meeting thereafter in Canada to plan the
nitty-gritty including the exact flight schedules and how they would
choreograph the handoff of the spies.

But once the deal was settled on, once the deal was arranged, it was two
days after the midterms when President Obama convened a National Security
Council meeting at the White House, so the National Security Council could
get briefed on the deal and they could sign off on it. That was November
Sixth when the National Security Council got briefed on what was about to
happen with Cuba. And honestly, given Washington, one of the most amazing
parts of all of this, is that the National Security Council knew about all
of this as of November 6th. And here it is, December whatever, and none of
it leaked. None of it leaked over the next six weeks. It didn`t leak and
it worked. And so here are the three Cuban spies. What we traded to them,
meeting with Raul Castro, and somewhere in America right now, apparently,
is Rolando Sarraf Trujillo, who President Obama described yesterday in his
speech. We don`t know where in America he is, but he was apparently
brought to this country with the president thanking him and singing his
praises after he spent nearly 20 years in jail for spying on behalf of this
country inside Cuba`s Intelligence Directorate. I know, right.

And meanwhile, while all of that has been happening, all of that school
doggery and secrecy and drama and stuff you wouldn`t believe if that was in
a book, meanwhile, at the same time, we are told now that President Obama`s
participating in daily meetings with intelligence, diplomatic, law
enforcement and military officials on another super-secret issue of
national security intrigue. And this one concerns North Korea. Last night
we reported that anonymous U.S. government sources were letting it be known
that the government had concluded that North Korea as a state entity was
behind the attacks on Sony Pictures recently. And the attacks on Sony
Pictures, the hacking attacks on Sony Pictures have basically been a cross
between a celebrity gossip story and a particularly dramatic business
story. Sony had their computer networks hacked. They had all of their
private and proprietary company information posted online, including early
lurid and damaging personal e-mails, things like medical histories, also
their most valuable intellectual property including the scripts for
forthcoming movies. The hackers also destroyed information on some Sony
machines by just wiping some computers clean. It was basically a very
dramatic business story with a lot of gossip and celebrity news mixed in,
until it crossed into a different kind of story.

When the hacking also develops to include threats that there would be
physical attacks on movie theaters that showed Sony Pictures` new comedy,
which satirically depicts the assassination of North Korea`s Kim Jong-un.
Since those threats on movie theaters were publicized, lots of people have
expressed anger at Sony Pictures and at the nation`s major movie chains for
essentially caving to that threat and saying OK, then they wouldn`t show
the movie. But, beyond what those businesses chose to do and how they
chose to assess the risk and how they made the business decision they had
to make and the values decision they had to make as companies, beyond that,
as a private business matter, the United States government has some really
woolly decisions to make here now.
I mean first of all, there is a big picture of question of to what degree
an attack on a private company is a U.S. Government responsibility, all
right, to either prevent or respond to. Earlier this year, you might
remember the U.S. government indicted five Chinese military officers for
their alleged role in hacking into American companies in order to steal
trade secrets. So, is this the same kind of criminal matter? And if so,
does an indictment make sense? Does it make more sense to against North
Korea than it did against China? Nobody expects those five Chinese
military officers were actually ever going to end up in an American
courtroom facing those charges. That prospect seems even more remote for
anonymous North Korean hackers.

Beyond the attack on Sony, though, there`s also the threat to kill
Americans on U.S. soil. This threat of physical violence. I mean by -
we`ll all be killed at the movie theaters if anyone of us choose to offend
the dear leader by going to the mall to see this movie that the North
Koreans don`t like.

Both President Obama and Homeland Security Secretary Jeh Johnson have now
said very clearly that Americans shouldn`t be afraid of that threat in a
material way. Americans should feel very free and very safe in going to
the movies. Jeh Johnson told Andrea Mitchell today that the government has
no specific credible intelligence of any attempt or any plan to attack
movie theaters or any plan like that that might be in the works.

But the question for the U.S. government is how to respond to the fact that
the threat has been made, whether or not the threat is credible. I mean,
clearly, if this is North Korea, and this is them taking action as a state.
They`re trying to provoke some sort of response from the United State as a
state. I mean they`re reason for living. They are justification for why
the North Korean government has to be as crazy as they are, is that they
are constantly telling their own people that they`re already at war with
the United States. That we`re obsessed with them. That we are hostile to
them, that the United States is constantly threatening to invade them and
they`re only defending themselves from the United States and our terrible
aggression. That`s their whole line to their own people.

In August 2012, we did military exercises with South Korea. Kim Jong-un
announced that it was our war rehearsal for our impending invasion of North
Korea. January of last year, North Korea said their no long range rockets
should be seen as a new phase in their ongoing war with the United States.
Last February, they did another nuclear test. And they said they had to do
that nuclear test in order to defend themselves "in the face of the
ferocious, hostile act of the United States." Last March, they announced
that they were not only at war with South Korea again, but their war with
us, have basically gone to a levying (ph). Last March North Korea said
they would not limit themselves to limited warfare with the United States.
But, rather, they would engage in all-out war and nuclear war. North
Korean state media reported this subtle little hint of a threat towards us
at the time, "We will first target and dissolve mainland United States,
Hawaii and Guam and the United States military base in South Korea. That
same month, they then released this rather amazing propaganda video showing
how they would use North Korean missiles to blow up the White House and the
U.S. Capitol. And you get the point.

So they already tell their own people that the United States is waging a
war on them. That`s how they justified to their own people why they have
to be so fricken crazy and repressive, because only Kim Jong-un can keep
the North Korean people safe from the invading terrible Americans.

Whatever response they are trying to provoke from the United States
government right now should not help them make that case. They really do
want war or at least something that looks like war with us. They want to
see important enough that we would have a war with them. And so the White
House today went to great pains to say that what they`re considering, what
the president is having all of these meetings about on a daily basis now is
what would be the appropriate, proportional response to what North Korea
seems to be doing.

(BEGIN VIDEO CLIP)

JOSH EARNEST, WHITE HOUSE PRESS SECRETARY: We need a proportional
response. Sophisticated actors, when they carry out actions like this, are
oftentimes, not always, but often seeking to provoke a response from the
United States of America. They may believe that a response from us, in one
fashion or another, would be advantageous to them.

(END VIDEO CLIP)

MADDOW: So what are the rules here? And what are the options. With any
normal country, you`d, like, yank the ambassador, right? You try to
organize sanctions, but, because it`s North Korea, we already don`t have an
ambassador. We don`t have diplomatic relations with them already. And
they`re already under incredible sanctions. They`re also incredibly
internationally isolated because of every other crazy thing about them,
including their nuclear program. North Korea is already a pariah state
among the nations.

So the normal things you would do to isolate a country as punishment for
bad behavior, those aren`t available in the case of North Korea. President
Obama is said to be meeting with law enforcement, intelligence agencies,
diplomats and the military in terms of how to come up with a response to
what North Korea may or may not have done, but the U.S. government is
leaning towards saying they did it.

One part of the military now is the U.S. Cyber Command, which is based at
Fort Meade along with the NSA. We tend to think of Cyber Command as
playing defense against attacks from other countries on the United States
and U.S. interests. But are they an option for a case like this in terms
of playing offense as well? Is that part of what the United States is
considering in terms of a range of options?

And if the United States does decide definitively that this is North Korea
and that we are going to respond somehow, what are the odds that we won`t
actually know what our government response is? Because it will be done in
secret as some sort of covert action. Hold that thought.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

EARNEST: We need a proportional response. Sophisticated actors, when they
carry out actions like this, are oftentimes, not always, but often, seeking
to provoke a response from the United States of America. They`ve made
believe that a response from us in one fashion or another would be
advantageous to them.

(END VIDEO CLIP)

MADDOW: Josh Earnest speaking today at the White House. Joining us now is
Jason Healey, cyber security expert and director of the Cyber State Craft
Initiative at the Atlantic Council.

Mr. Healey, thanks very much for being with us, I appreciate your time
tonight.

JASON HEALEY, CYBER SECURITY EXPERT AND DIRECTOR: Thank you.

MADDOW: So the watch word from the administration has been proportional
response. In the context of a big hacking attack and then a threat of
physical violence, do we have any state crafty sense of what proportional
means?

(LAUGHTER)

HEALEY: Well, and especially what does proportional mean when you`re
dealing with crazies like North Korea.

MADDOW: Yeah.

HEALEY: So, when the North Koreans sank a South Korean Naval vessel, that
killed 46 sailors, I mean the response to that, the proportional response
to that was, you know, cranking up sanctions to 11. So, we can go do that
again. We can crank sanctions back up to 11. I`m sure we`ll consider
that. I`m sure we`ll consider talking with our allies - Japan, South
Korea, maybe even going to the U.N. Security Council. But normally, when
we talk about a proportional attack, we mean an attack that kills people.
This was predominantly an attack on free speech, on free expression, on
expressing opinions. And so, this is going to make it extremely difficult
for the White House. I don`t see how they get their way through this
easily.

MADDOW: In terms of how the United States has decided or how the United
States is in the process of deciding that North Korea did this, in terms
of, I mean, all forms of warfare and all forms of, you know, foreign policy
and international disputes, attribution is always key. Knowing exactly who
did this to you is key. Can you ever truly have sort of fingerprint
identification in hacking attacks like this? When it comes to things that
can be committed not only by remote, but routed through all sorts of
international servers?

HEALEY: It certainly can be very confusing, but things like this tend to -
well, the most disruptive attacks and I don`t necessarily count Sony as
part of that, tend to happen when there`s a real national security crisis
between existing geopolitical rivals. I mean like Russia versus Estonia in
2007. Or Russia against Georgia in 2008. I mean you never see
Philippines go up against Botswana.

MADDOW: Right.

HEALEY: I mean you`re seeing it during existing national security crisis
for the most damaging ones. For ones like this, like Sony, like some of
the other ones who we`ve been seeing lately, they`re so confusing because
they are actually aren`t all that damaging? You know, nobody has died.
It`s been a bad attack on a company, but not that bad an attack on a
country.

MADDOW: In terms of America`s capabilities in this type of - I don`t want
to call it even conflict, I`m not sure, in terms of America`s capabilities
when it comes to cyber security and, indeed, cyber warfare. The United
States cyber command within the military, is that, in a sense, essentially,
a defensive organization that`s about hardening American targets, either
governmental targets, military targets or even American commercial targets?
Or is that part of our military that is doing offensive work to screw up
other countries, essentially, by hacking in the name of the U.S. military?

HEALEY: No, no, no. They are not just defensive. And our cyber leaders
are quite proud about their offensive capabilities. One of the previous
advice chairman of the Joint Chiefs of Staff really wanted to get out there
and brag about our capabilities, so that it might possibly deter our
adversaries. You know, after the attack on Stuxnet, this is the attack on
Iranian uranium enrichment, I don`t think many countries would doubt our
prowess in using cyber capabilities. We`ll use them.

But they`re the North Koreans. What is there to shoot at? If the attack
were still going, we could at least, you know, counter attack and try to
make it stop. But what can you do now? I don`t think there`s much to be
done on cyber.

MADDOW: Jason Healey, director of the Cyber State Craft Initiative at the
Atlantic Council. This is - it`s slightly mind-bending stuff for those of
us who don`t spend a lot of time thinking about it. Thanks for helping us
understand. I appreciate that.

HEALEY: Thank you.

MADDOW: All right, so a little stumbling out of the gate never hurt a
really good presidential candidate. But what does it do to a really bad
presidential candidate? Stay with us, that story is next.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Some people have said we ought to close Guantanamo. My
view is, we have to double Guantanamo. We have to make sure that the
terrorists .

(APPLAUSE)

(END VIDEO CLIP)

MADDOW: Double it! I see your support for Guantanamo and I raise you one
whole other Guantanamo. Double it.

This is a strategy to try to stand out from the pack when you don`t, right?
You go big. Seven years after double Guantanamo, now, it`s Jeb Bush. A
couple of weeks ago, Jeb Bush had an event in the state he used to govern
in Florida. He gave a speech to an anti-Castro Cuban American PAC.

(BEGIN VIDEO CLIP)

JEB BUSH (R) FORMER FLORIDA GOVERNOR: In fact, I would argue, I would
argue that instead of lifting the embargo, we should consider strengthening
it again to put pressure on the .

(APPLAUSE)

MADDOW: Double it! Five decades of embargo is just not quite enough. Go
longer. We need a bigger, stronger one. Jeb Bush has been out of office
for almost eight years. The last time he faced an actually competitive
election was 20 years ago. So, as a candidates, Jeb Bush might feel a
little rusty, he`s going to have to find his sea legs out there on the
campaign trail, even though it`s a mixed metaphor. On Tuesday this week,
Jeb Bush officially announced on the Facebook, that he will actively
exploring the possibility of running for president. He announced that on
Tuesday, and then the very next day, huge political windfall for Jeb Bush.
He got the chance to do some very active exploring of his candidacy when
President Obama announced that he was normalizing relations with Cuba.
That is, Jeb Bush`s pet issue has been for decades. I mean, he made his
Florida political career by building support among the Cuban American anti-
Castro community.

So Jeb Bush jumped right in, as soon as President Obama made his
announcement. But he jumped in with sort of a mealy-mouthed comment to a
"Miami Herald" reporter. He said "I don`t think we should be negotiating
with a repressive regime to make changes in our relationship with them."
Didn`t exactly sail out of the park on that one, right? Later in the day
decided, that really wasn`t strong enough, he decided to go back to
Facebook where he is apparently more comfortable and he gave it another
shot. He said this "The Obama administration`s decision to restore
diplomatic ties with Cuba is the latest foreign policy misstep by this
president and another dramatic overreach of his executive authority." So
no letting up on the sanctions, double the embargo against Cuba. The
embargo is what we need." It was sort of an awesome position, strength,
right, few hours until Andrew Kaczynski at BuzzFeed noted that Jeb Bush has
been getting paid for years by a bank that has been nailed for violating
the sanctions against Cuba and illegally doing business there.

Since 2008, Jeb Bush has been a very well-paid advisor to the British Bank
Barclays. They`ve been paying him roughly a million dollars a year. He`s
been there since 2008. In 2010, Barclays was fined nearly $300 million
because the bank was found to have been deliberately hiding its financial
transactions with Cuba and several other sanctioned regimes over more than
a decade.

So President Obama normalizes relations with Cuba. Jeb Bush hammers
President Obama for easing up on sanctions against Cuba. BuzzFeed reports
that Jeb Bush has been working for a bank that was violating those
sanctions for years. And then this morning, in a totally unrelated
development, it was announced that Jeb Bush will be leaving Barclays in two
weeks. Tada!

Jeb Bush had to know this was coming. He was working for Barclays when
they were forced to pay a $300 million fine for evading the embargo in
Cuba.

His signature issue is the embargo in Cuba. But right out of the gate, his
first day of actively exploring of running for president, he runs right
smack into that wall. People say that Jeb Bush is the new Mitt Romney.
People who really like the idea of Jeb Bush running for president say that.
People who really hate the idea of Jeb Bush running for president say that,
too.

So far, at least he is proving it.

(COMMERCIAL BREAK)

MADDOW: What you are about to see is for mature audiences only. If you
get uncomfortable witnessing public displays of affection, please overt
your eyes.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I respect that guy. He is tough. He delivers what he
says he`ll deliver. He notices people. He presents himself as a real he-
man. Nastoyachyi muzhik. But he lives up to it.

CHARLES KRAUTHAMMER: He`s a statesman. He`s a partner in peace. And he`s
in a position where he can lecture the United States of America.

RUDY GIULIANI (R) FMR. PRESIDENTIAL CANDIDATE: He decides what he wants to
do and he does it in half a day. He makes a decision and he executes it.
Quickly. And everybody reacts. That`s what you call a leader.

(END VIDEO CLIP)

MADDOW: The right wing is in love. They have been all year. And it`s
been awkward and embarrassing to watch all year. But, now, it has become a
love that dare not speak its name. They have had to put their love back in
the closet. It`s very sad. But that very sad story is coming up next.
Stay with us.

(COMMERCIAL BREAK)

MADDOW: Tomorrow afternoon at 1:30 p.m. Eastern, President Obama will hold
his end-of-the-year press conference. The end-of-the-year press conference
is always a little weird. There`s always at least some news made and,
frankly, everybody is usually a little punchy.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES OF AMERICA: You know what
they say. It`s the most wonderful press conference of the year.

(END VIDEO CLIP)

MADDOW: It is. It usually is. It`s 1:30 Eastern Time tomorrow. The most
wonderful presidential press conference of the year.

But, today, on the other side of the world, Russian President Vladimir
Putin held his end-of-the-year press conference, too. His are pretty
wonderful on their own way. They usually go on for three hours or four
hours or more. Today, his marathon session with the press also included
questions about his love life. President Putin assured the Russian people
today that he and his ex-wife are on good terms and he also announced today
that he has found someone new. He told the Russian press today, "I have
love in my life. I love and am loved". So, Vladimir Putin`s current
status is loving and loved. The loved part, we actually already knew about
in this country. At least anyone who watches Fox News already knew it.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Russia is a player here, and it`s a big player. Not
the United States. I think frankly, in the last week, Vladimir Putin has
looked like a statesman.

KRAUTHAMMER: Instead of a pariah, he is a statesman, he`s a partner in
peace, and he`s in a position where he can lecture the United States of
America.

SEN. RAND PAUL (I) KENTUCKY: I think, you know, if this were a tennis
match, it would be the umpire shouting advantage, Putin.

MITT ROMNEY: I think Putin has out-performed our president time and time
again on the world stage.

GIULIANI: Putin decides what he wants to do and he does it in half a day.
He makes a decision and he executes it. Quickly. And then everybody
reacts. That`s what you call a leader.

UNIDENTIFIED MALE: Putin is playing chess and I think we`re playing
marbles. And I don`t think it`s even close.

UNIDENTIFIED MALE: I think Mike Rogers was right yesterday when he said
the president is playing marbles while Putin is playing chess.

(END VIDEO CLIP)

MADDOW: The conservative line on Vladimir Putin is that he puts our own
American president to shame in smarts and leadership and decisiveness and
pacts. Putin is playing chess while President Obama is playing something
that doesn`t even happen on the chess board. Putin makes up his mind and
he does it, and after that - Vladimir. American conservatives have kept up
this strange love song for Putin as Russia invaded Ukraine this year and
took over Crimea as Russia was basically getting kicked out of the ranks of
first tier nations in the global community. For American conservatives,
he`s been an object of lust and wonder all year long. But for the rest of
the world, Vladimir Putin has faced repeating rounds of sanctions by the
U.S. and other countries, and those sanctions have really, really hurt.
This month Putin cancelled a big pipeline he meant to build for Russian
gas. It turns out when you alienate the world by invading other countries,
you also alienate your customers.

He`s also done almost nothing to diversify the Russian economy, and so it`s
- so that it`s not so depending on oil production. That`s meant that the
collapsing price of oil has been a sledge hammer to the already-shaky
Russian economy. The Russian economy is sliding into a recession. Their
currency, the Russian ruble fell off of a cliff this week. To you and me,
this just looks like a chart or maybe somebody going cliff diving. But to
bankers, this is a portrait of fear. In his hours-long press conference
today. Mr. Putin blamed external factors for the economic nose dive in
Russia. He assured the Russians that the country would bounce back. But
in the streets, ordinary Russians this week have been racing to buy
anything they can buy that might hold value. Racing to buy whatever they
need right away because there`s no telling what their money is going to be
worth from hour-to-hour. It got so bad this week that Apple, the Apple
Corporation stopped selling stuff in Russia. You couldn`t buy an iPhone or
an iPad or anything else from Apple`s online store in Russia, because Apple
couldn`t figure out how much to charge you anymore, because no one can be
sure what Russian money is worth. Only that its value changes from hour to
hour. And so, Mr. Get it done, Mr. Now that`s a real leader, Mr. Three-
Dimensional Chess, Putin, appears to really, truly, finally have driven his
nation`s economy to ruin.

(BEGIN VIDEO CLIP)

GIULIANI: That`s what you call a leader.

(END VIDEO CLIP)

MADDOW: I, of all people, realize the temptation to say neaner, neaner at
a moment like this. And it would be nice. Every once in a while, dear
conservatives acknowledge that this was may be an inappropriate crush.
That may be they fell for the manly propaganda, and actually, he`s not a
genius in the Obama administration strategy to isolate him and punish him
by getting the world on our side against him. That strategy appears to
have worked and to be working.

But we`re not going to get an acknowledgment like that on Fox News. And in
the absence of that, since it`s never going to happen, should we worry a
little bit that Russia is tanking as hard as it is? I mean first of all,
Russians are people, they`re not all Vladimir Putin. And they`re going to
suffer as this crisis wears on. He`s going to be fine. But also, Russia
is a big country with a lot of people. And in the interconnected global
economy, it`s not usually a zero sum game where some people are losing,
everybody else wins. If Putin sucks too badly .

(LAUGHTER)

MADDOW: If Russia is going off the cliff, in the way that`s not going to
reverse any time soon, how much should we worry about that despite the
political schadenfreude that it might bring with this? Joining us now is
Michael McFaul. And earlier on the show, he was the U.S. ambassador to
Russia, he`s also NBC News analyst professor, Mr. McFaul, it`s nice to see
you. Thanks for being with us.

MICHAEL MCFAUL, FMR. U.S. AMBASSADOR TO RUSSIA: Yeah, thanks for having
me.

MADDOW: Does the rest of the world face trouble if the Russian economy
continues on the path that it`s in? Are they isolated enough from the
global economy that their problems can be their own? Or could they drag
other people down with them?

MCFAUL: Well, first of all, I`ve just got to say, I`d disagree entirely
with what you just said before coming to me about this Putin, the great
leader and, you know, I think maybe he looked great in the spring. But if
we`re now at the end of the year, decisions he made then are coming back to
haunt him. And the people of Russia are suffering from it. To your
question, I do think we don`t want the Russian economy to tank. It would
have negative consequences for the global economy. Instead, what we want,
is for Putin to change his behavior in Ukraine. And I`m cautiously
optimistic that the economic pressure, of which sanctions have been a part
of, have now compelled him to start doing things in that direction. So, I
thought- I, you know, Putin is always a big bravado guy. Especially in
these press conferences, but I was struck by how cautious he was and maybe
we just might be able to do a deal after the New Year.

MADDOW: Do you see some path by which he could make basically the kind of
change that the American - that the American government wants and a lot of
other countries around the world wants? But he could somehow call it a win
for himself? He could find some showing face? A saving face way to do it?

MCFAUL: Of course, that`s the hard part. Because saving face is so
important to him personally. But I do see it. I see a way forward, if,
indeed, there could be some kind of accord principally done between
President Poroshenko and the so-called rebels, or freedom fighters,
whatever you want to call them, in eastern Ukraine. And if Poroshenko, the
president of Ukraine said we have a deal, Putin could then endorse that and
then the West, Europe and the United States can endorse that. The key
here, though, is the Ukrainians. It`s got to be a deal that Kiev supports.
It can`t be some deal that Putin and Obama cut.

MADDOW: When the price of oil was high, that gave President Putin padding,
essentially, in terms of how much he could bear from international pressure
and sanctions and these sorts of things. He could afford to do things
like, you know, take over Crimea and host the Olympics and whatever else he
wanted to do. Now that he really doesn`t have any money to spend and they
are feeling this crunch and particularly looking at what`s happening with
their currency, what does that do to his leeway, to his options for keeping
the Russian public happy with him and for booing himself politically at
home?

MCFAUL: I think he has a problem. I mean, you know, opinion polls say
that 80 percent, but remember, he controls all television stations, major
television stations. He controls the Congress, there is no opposition
leader. And so, I think that number is soft. And people are beginning to
wonder about his course. You see it in polls and I feel it anecdotally in
talking to my friends in Russia. And when he said today, he said well, in
two years, we`re going to turn it around. That`s what he claimed in his
press conference. But he didn`t outline a strategy for doing that. And
that didn`t set well with bankers, and it didn`t set well with common
Russians who are worried about the future. It`s always been his deal, you
let me govern the way I want, I will grow the economy. Next year the
economy isn`t going to grow, and that does I think overtime create a real
problem for him moving forward.

MADDOW: Michael McFaul, former U.S. ambassador to Russian, now an NBC news
analyst. Professor, it`s great to have you here. Thanks very much for
your time.

MCFAUL: Yeah, thanks for having me.

MADDOW: As bad as things are for Vladimir though, he is loved.

(LAUGHTER)

MADDOW: We`ll be right back. Go away.

(COMMERCIAL BREAK)

MADDOW: Programming notes are later tonight. My colleague Chris Hayes,
who will always and forever be known to me as lamb chop (ph). Lamb Chop
will be packing hit: Chris has done a really, really good "All in America"
series, on the one kind of gun that the NRA doesn`t want you to be able to
buy in this country. It`s really, really, really, really good feature.
And it`s airing tonight at 11 p.m. Eastern here on MSNBC. Lamb Chop`s got
a gun.

(COMMERCIAL BREAK)

MADDOW: This is a happy story. Tonight, we have a website for sale. Or
for giving away to a good home and it`s because of this person. Her name
is Christina Kishimoto, Dr. K. to people who work with her. Dr. Kishimoto
is the school superintendent, which means she runs whole school districts.
The teachers and the custodians and the bus drivers and the principals and
the coaches, they all work for her.

But she also has a boss. Her boss as superintendent is the school board.
And this summer Dr. Kishimoto got a new superintendent job. She was hired
by the school board to be the new superintendent in Gilbert, Arizona.
Gilbert, Arizona is an extension sort of the sprawl of Phoenix. It`s a
very, very conservative part of the country. And when the local elected
school board decided to hire Dr. Kishimoto, the Tea Party majority on that
school board was also at the same time already working on a new idea. They
wanted to tear pages out of the honors biology textbooks in Gilbert,
Arizona. They wanted to redact parts of the biology textbooks that made
them uncomfortable.

That was the ongoing discussion that this new superintendent walked into on
her first day on the job. In October, Dr. Kishimoto`s new bosses, the
conservative school board, they decided that the redacting should happen.
The board ordered her to come up with the plan for getting rid of the
offending material in the textbooks. You know, sharpie over the
paragraphs, cut the paragraphs out, if it`s cheaper and faster, then just
rip the pages out, just rip the pages out. Find a way to get it done, get
that material out of there. And Dr. K, report back on your chosen method.
That happened in October. And Christina Kishimoto, the new superintendent
basically said no. I mean, she couldn`t tell them no exactly because the
school board is her boss, she serves at their pleasure, but she told them
that their big idea would not work out the way they expect it. She said,
reasonably, "Giving students` textbooks with blank spots or missing pages
will just send students to the Internet machine to find the information on
their own." Instead she suggested to the board that they should turn the
matter over to her, someone who knows how education works. They should let
her come up with a plan for maybe not cutting stuff out, but instead adding
additional information that might make the board more comfortable.

As this drama was playing out, the town of Gilbert held an election for
school board. And in that election, the town decided on a new majority
that opposes removing true facts from the textbooks. The new majority is
still very conservative, but they don`t want the pages torn out. And they
take over in January.

So there`s been this interesting lame duck period. Because in the
meantime, the old Tea Party majority is still around. They had one last
meeting this week at which they could order the superintendent to tear out
the pages if they wanted to. Do it now.

They held that final meeting this week, the superintendent once again told
the Tea Party majority that she disagreed with their big idea and the board
caved. They changed their minds. Look at the headline. "Gilbert Board on
Biology Textbook Redaction -- Never Mind. They decided to go with the
superintendent`s plan to add information alongside what`s already in the
books rather than tearing stuff out.

Dr. Kishimoto told us yesterday she`s already begun building a team of
actual biology teachers in Gilbert who will write the two or three extra
pages that will make the school board more comfortable. The plan is to put
these extra pages, these additional information in an envelope that they`ll
attack to the inside cover of the biology books. She told us she did not
find it scary facing down her new bosses on an order she disagrees with.
She says, she just kept saying what she thought was the right thing to do.
"I knew I had to walk a careful line here. I added my perspective and I
put it in there as a perspective."

Dr. Kishimoto did that over and over again until she won. And so now we
happily have a Web address to give away. We have been keeping the pages
that were to be redacted online we post on front and back for Gilbert
students. We posted them at arizonahonorsbiology.com. We posted them
there for safekeeping, in case they were torn out of the books. But now we
don`t need that address anymore. Arizona honors biology.com has served its
purpose. But is there an Arizona honors biology teacher out who can put
Arizona honors biology.com to an unforeseen good use, please holler out,
maddowblog.com. Let us know. The address is up for grabs. Very happily.

(COMMERCIAL BREAK)

MADDOW: For aggies, for students and alums of Texas A&M University, this
is a campus icon. It`s called the academic building. But today, it almost
got a new and way less generic name. Today, the board of regents at Texas
A&M was set to rename that central building on the Texas A&M campus, so
instead of being called the academic building, it was going to be called
the Governor Rick Perry Building. James Richard Perry, aka a Rick Perry,
class of `72, seen here in his Texas A&M cadet uniform.

The plan for the name change came as a surprise to current Texas A&M
students. They were only told about the name change a couple of days ago.
Students were reportedly not psyched that the Academic Building was going
to get named after a guy who had a 2.2 GPA.

Earlier this week, the governor said he was excited by the honor of having
the building named after him. But now after the students protested it`s
not going to happen. Governor Perry is trying to say it was his decision.
He didn`t want that building named after him after all. But honestly, he
said just a couple of days ago how psyched he was. If the students hadn`t
protested, it was going to happen. Now, because they protested it will not
happen. And if that`s happening in Texas at Rick Perry`s alma mater, who
here thinks it`s likely that Rick Perry is going to elected president of
the United States?

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

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

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

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