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'The Rachel Maddow Show' for Wednesday, July 13, 2011

Read the transcript to the Wednesday show

Guests: Sen. Sherrod Brown, Jay Fahy


RACHEL MADDOW, HOST:  Good evening, Lawrence.  Thanks very much.

And thanks to you at home for staying with us this next half hour.


“The Best New Thing in the World Today” coming up at the end of the show, I will warn you, has a little more soccer in it.  I know, American audience—soccer, I know, I‘m American too, I‘m just warning you.

The Women‘s World Cup match this past Sunday, U.S. versus Brazil ended with this spectacular, beautiful cross and goal that even people who hate soccer, or even people who are indifferent to it have to admit was a beautiful thing.  So, more of that happened today.  And that will be coming up on “The Best New Thing in the World.”  That is fair warning.

But you know what?  It got me thinking, every goal counts the same in soccer, right?  Every goal is a point.  Every goal is the same thing whether it‘s pretty or not.  And earlier in that amazing game on Sunday, just as important to the final score, what counted just as much as this beautiful pass!  Oh, my God, it‘s most beautiful thing I‘ve seen in my life.

What counted just as much as that goal was one of the ugliest goals of all time—it was an own goal.  Own goal.  Ugh!  Brazil, scoring a point.

Look at that, yellow in yellow.  Oh, that‘ their own goal.  Brazil scoring a point against themselves, putting the ball into their own net.

Aww!  This is something that happens from time to time, in soccer there have been other notable, really embarrassing own goals in history.  Oh, off his own face.

Even if you are rooting against the team that is scoring against itself, whoops, it is just—you watch this—oh, God—there‘s something that taps into our human empathy.  Look, oh!  When we somebody score an unforced error against themselves like that.

I mean, oh, my God!  Own goals.  It‘s painful.  You watch these things, you feel the pain of the people having these things happen to them.  It‘s painful.

I mean, look at this one.  Watch this one.


UNIDENTIFIED MALE:  On this vote, the yeas are 243, the nays 193, one recorded as present.  Two-thirds not being in affirmative, the rules are not suspended on the bill and the bill is not passed.


MADDOW:  John Boehner, John Boehner, another own goal.  Again, again he does this.

Last night, House Republicans brought their own bill to the floor for a vote only to see it defeated by themselves.  It was a bill to eliminate energy efficiency regulations for light bulbs, and it lost.  That is not supposed - that is not how it‘s supposed to work when you are the majority party in the House and the minority party has almost no power.

You control the floor.  You control what gets voted on.  You control when it gets voted on.

Your own party‘s stuff you are supposed to be able to pass—and if you can‘t pass something, you certainly don‘t bring it up.  Why would you?

But with John Boehner in charge in the House of Representatives, the Republicans keep kicking the ball into their own net over and over and over again.  Back in February, you may remember, in a span of 24 hours, Speaker Boehner brought a Republican U.S. out of the U.N.-type bill on to the House floor.  It was defeated.

He brought a Republican Patriot Act extension bill to the House floor, it was defeated.  Then he was forced to pull a trade bill he supported from the floor because it was clear that it, too, would be defeated, all in the span of about 24 hours.

Last month, John Boehner had to pull a Democratic Libya bill from the floor at the last second because—oops, oh, jeez, forgot to count the votes, looks like this one might pass, and Republicans did not want it to pass.  And now this, a Republican-sponsored light bulb bill that John Boehner brought to the floor goes down to defeat.

This is what they call a messaging bill, a populist, pointless, never going to affect the law, let‘s just bank this purely for the political ads, messaging bill about opposing light bulb tyranny or something.  Republicans have a nearly 50-seat majority in the House.  It is their own bill, they get to determine what comes up and under what rules they are supposed to count the votes before they do anything to make sure that what they want to pass will pass or don‘t bring it up.

But under John Boehner -- 


UNIDENTIFIED MALE:  Oh, my goodness!


MADDOW:  Oh!  Under John Boehner‘s leadership in the House of Representatives, stuff like this just happens, and it happens all the time.  This is the House speaker who forgot to swear in two of his new members of Congress on the first day he was in charge of the House.

This is the House speaker who allowed two different members of his caucus to give a rebuttal to President Obama‘s State of the Union Address and they didn‘t agree with each other.  This is the House speaker who made a big self important photo-op out of reading the Constitution on the floor of the House to start the legislative year, and then he left some parts of the Constitution out and had to do them later.

This is the House speaker who made another big, self-important show of imposing new rules for the House, that every time they‘d propose spending, they would have to propose cutting something to offset that spending, he makes a big deal out of this big, new, responsible rule and then with the very first bill he introduces, he violates his own rule.

This is the House speaker who does photo ops like this one.


REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE:  When we say we‘re going to cut spending, read my lips: we‘re going to cut spending.  Thanks.


MADDOW:  After saying “read my lips,” Mr. Boehner then walks offstage and was heard saying to himself as he walked offstage right there, quote, “I can‘t believe I just said.”

It‘s his own press conference.  Nobody said, Mr. Speaker, can we read your lips on this?  No, he just brought it up, repeating the most famous Republican screw up line of the last 30 years, unforced error, own goal, again.

Here he is on FOX News last night talking about the biggest political fight in the country right now, the need to raise the debt ceiling.


BRET BAIER, FOX NEWS:  So, what is next?  What if you don‘t get a deal?

BOEHNER:  I don‘t know.


MADDOW:  Third in line to the presidency, speaker of the House—dunno.

Whether or not you agree with John Boehner on policy, whether or not you think John Boehner on policy is right or wrong, whether or not you want him to succeed politically or you don‘t want him to succeed politically, John Boehner is not good at his job.  John Boehner is not succeeding.  Whether you think that‘s a good thing or a bad thing, I think it‘s factually evident he‘s not good at being speaker of the House.

When Mitch McConnell announced his plan to have Republicans surrender on the debt ceiling essentially, to just let Democrats raise the debt ceiling, have the country avoid default and have Republicans really extract nothing in exchange for that, John Boehner immediately endorsed Mitch McConnell‘s plan.

He put out a statement saying that he shares McConnell‘s frustration and that Republicans are unified.


BOEHNER:  Frankly, I think Mitch has done good work.


MADDOW:  John Boehner may, in fact, believe that Mitch McConnell has done good work.  But he doesn‘t just have to decide whether he thinks that, whether he likes Mitch‘s plan, how he‘s going to vote on it, he‘s not just the member of Congress, he is the leader of the House of Representatives.  He is the leader of the Republicans in the House, and they are in control of the House.

And when a speaker is good at that job, the speaker saying, “I agree,” the speaker saying thumbs-up, the speaker giving a thumbs-up to something means that that thing gets the thumbs up, means that thing will pass, just like the light bulbs bill will pass, right?

While John Boehner is busy endorsing the Mitch McConnell debt ceiling plan, it does not seem like he speaks for anybody else.  Here‘s what Republicans in the House, who he supposedly leads, are saying about the issue.

Quote, “There is zero chance it will pass the House,” said one House leadership aide.  “Zero.  I‘m not sure it would get any votes from our side.”

A second aide agreed, quote, “It won‘t pass.”

A Republican congressional source telling “Reuters,” quote, “I don‘t see how members could vote for that.”

“The Wall Street Journal” writing today, quote, “The most contentious strikes in the days the U.S. had strikes came when executives and union leaders reach add agreement only to discover that union leaders couldn‘t deliver their membership.  That‘s the House today.  The Republican rank-and-file is distrustful of the leadership, and the leaders don‘t completely trust each other.”

On that last point, just a few hours after John Boehner went on national TV to endorse the Mitch McConnell debt ceiling plan, to say that Republicans are unified, here‘s what the number two Republican in the House, Eric Cantor, told “Politico,” quote, “Nothing can get through the House right now, nothing.”

Under John Boehner‘s leadership in the House, that, in fact, appears to be true, they can‘t even get their own members sworn in this year.  They can‘t even pass stupid, pointless, message legislation that they bring up themselves, let alone do something hard.

Under John Boehner‘s leadership, Eric Cantor is right, nothing happens in the House, not even what the Republicans want to happen right now even though they are supposed to be in control.

For the personally-driven, Beltway, horse race, who‘s up, who‘s down politics, the consequence of that is that John Boehner is failing as a speaker, and, therefore, arguably, he may not last in the job for the long-term.  But for the country substantively, if the House of Representatives cease to function because John Boehner is bad at his job, there‘s something bigger to worry about.  First of all, they do need to get the debt ceiling raised, surrender or not, particularly with Moody‘s now saying they are reviewing the nation‘s credit rating, our bond rating, because raising the debt ceiling hasn‘t happened yet.

But beyond that, there is the substance of the matter here.  This is a graph showing all of the various recessions that this country has experienced since World War II.  That yellow line right there, that is the recession of 1980.  This one here is the post-Vietnam War recessions of the mid-1970s.

This green line shows the recession in 1953 after the Korean War.  This was another recession shortly after that, in 1957.  There was the recession of 1948 after President Truman signed into law the Fair Deal, that was the steepest recession in terms of unemployment after World War II.

Want to see the recession that we are in right now?  Yes.

The fight over the debt ceiling thing that we have been having, that is not the real crisis.  That is the Congress thing, that‘s a politics thing.  This is the real crisis, unemployment.  This is the financial catastrophe we are in the middle of.

Even the head of the Federal Reserve said today that whatever they thought a few months ago, the unemployment picture is so bad right now that another stimulus package, another Fed stimulus package might be necessary.

What can be done in the real economic crisis in the country if the House under John Boehner is totally broken?  If as his number two, Eric Cantor says nothing can get through the House, what can we do to get through the real crisis if Washington is broken thanks to Mr. Own Goal?

Joining us now is Democratic Senator Sherrod Brown of Ohio.

Senator Brown, it‘s nice to see you.  Thanks for being here.

SEN. SHERROD BROWN (D), OHIO:  Good to be back, Rachel.  Thanks.

MADDOW:  It seems to me that we are looking at one chamber of the U.S.  Congress that‘s not working even on its own terms at this point.  The Senate is usually that one that‘s all tied up, the House seems to be in a knot purely on the Republican side.

What do you think are the material consequences of that for the country right now?

BROWN:  I‘m concerned.  I mean, the House is divided into sort of the right wing and far right wing in the majority party.  Harold Meyerson of “The Washington Post” called and said this makes the far right nest, if you will, of the House Republicans makes the Gingrich years and the Gingrich majority looked like the Berkeley City Council.  And, you know, you can laugh at those things.

But I‘m concerned because I just think this House of Representatives is pretty dysfunctional.  John Boehner can‘t put his votes together.  Eric Cantor, who does most of the speaking and perhaps much of the thinking of the House, thinking on some terms, is so captive of the far right that even if John Boehner puts something on the floor with 150 Democrats to do what we need to do to raise the debt ceiling, Boehner is afraid for his job with Cantor lurking on the sidelines, standing in front of 100 or 125 Republicans.  So, I‘m very concerned.

Putting aside that, what they have simply failed to do, they won their elections talking about jobs, lost jobs in this country, lost jobs over the last three years, and they seem to have no solutions other than that kind of infighting.  So, I‘m very concerned about that half of the legislative branch of our government being able to do much of anything, and that concerns me.

It concerns Moody‘s, obviously, and their bond—in their rating, rating agency, in terms of AAA rating for the U.S.  And it concerns all of us, including the business community that‘s finally figuring out they‘ve got to engage with this Republican majority and get them to do things for the country, let alone all the infighting. They‘ve got to start thinking about what this means for the country, and I think that‘s sort of in third place.  They are not even thinking about that.

MADDOW:  I wonder if that last point that you made there about the influence of the business lobby in the Republican Party may be at least a way to see how things are going to move.  I mean, this debt ceiling fight we‘re having right now is essentially just a manmade congressional fight.  It‘s a fight that Republicans picked even though the debt ceiling always gets raised.

What do you think the prospect is of Congress dealing with the real non-political crisis in the country, the unemployment crisis?

BROWN:  Well, they picked this fight because following the dictate of Mitch McConnell, that their goal from November on after the election was to make Barack Obama a one-term president—everything flows from that, forgetting the jobs issue, forgetting the future of the congress.

I was talking to a major CEO in Columbus, the capital of my state, the other day, he‘s one of 300 CEOs that are writing letters—they are signing letters to—to, I believe, to the president, the leader of the Senate, the speaker of the House.  They‘ve got to move on this debt ceiling.

And then they‘ve got to move on job creation.

I mean, this whole Washington is all abuzz about debt and about spending, and those issues matter.  But the focus, you go to Dayton, you go to Springfield, you go to Mingo Junction, Ohio, you go to Toledo, the focus is always on jobs.  The people don‘t say, what are you doing about the debt ceiling?

They say, Senator, what are you doing about job creation?  Why are you passing these trade agreements?  Why aren‘t you doing an infrastructure bank?  Why aren‘t you putting people back to work?

That‘s what you need to be talking about.  That‘s what you need to be doing, from community college training to trade law that works, enforcing trade law, to tax law that says no more outsourcing of jobs, give them incentive to produce in this country, we need more manufacturing jobs, all of that.  And that‘s just been forgotten about in the House of Representatives.

MADDOW:  As the fight in Washington continues to be over whether or not the debt ceiling is going to be raised, you‘re pointing out business leaders want that settled so that we don‘t rattle the economic environment more than we already have with this—do you think that a potential solution here is what Mitch McConnell is offering essentially saying, OK, Democrats, you raise the debt ceiling, we will stay out of it.  You guys keep the country from going into default and we‘ll stay out of it and we‘ll deal with all of our policy agreements through other means.

Do you think this is the way this is going to end?

BROWN:  No, I think Mitch McConnell put his proposal forward because he‘s scared.  He‘s scared because, finally, the business community is pushing him hard saying you can‘t let this happen, Senator McConnell.  He has backed himself in a corner as his right wing friends have in both houses and he simply doesn‘t know what to do, because he‘s got to find a way to extricate himself and his party: one, from this happening, and second, from getting the blame.

He‘s probably—knowing Mitch McConnell—he‘s probably more afraid of getting the blame for this than he is actually what this would mean to the country.  But he‘s hearing from the business community that‘s very concerned, and he is, I believe, afraid for his own career and I assume for the country.  I‘ll give him that.

And I‘m hopeful he comes up with something else.  This is coming out of how do we embarrass Obama, how do we stick the Democrats with this, how do we keep this issue alive?

He wants to do this every six months for the next year and a half.  You do that and you undermine business confidence and consumer confidence for our government because this is terrible for the country.  When I hear conservative people around the state, many are friends, many of them I work with all the time, I call them on the phone, I want to hear what they are saying.  Many of them say, you know, it really is the uncertainty of what‘s happening with our government.

And the worse kind of uncertainty that‘s undermining all our chances for economic growth is this debt ceiling vote and what are we going to do about the debt ceiling, what are we going to do about jobs, what are we going to be about taxes, what are we going to do about the budget.

And this is putting us in a terrible position if Mitch McConnell wants to do this six months from now and then 12 months from now and then 18 months from now.  It‘s just pure insanity.

MADDOW:  Ohio Democratic Senator Sherrod Brown—thanks very much for your time tonight.  I really appreciate it.

BROWN:  Thank you very much, Rachel.

MADDOW:  Senator Brown making the case for getting this done once and for all and not doing it over and over and over again as the rest of President Obama‘s first term plays out.

All right.  It turns out shutting down the government of the state of Minnesota also means shutting off all Minnesotans‘ access to beer.  Seriously.  It‘s like what you‘d invent in a cartoon to give Minnesota a sense of urgency on ending the shutdown.  No more beer until this all gets done.

Details on that, ahead.



SEN. RAND PAUL ®, KENTUCKY:  Tonight, there‘s a Tea Party tidal wave, and we‘re sending a message to them.


PAUL:  It‘s a message that I will carry with me on day one, it‘s a message of fiscal sanity, it‘s a message of limited, limited constitutional government and balanced budgets.


MADDOW:  There is something wrong in the common wisdom about politics right now, about the politics of the last election in 2010, election night 2010 featuring Rand Paul there.

There‘s something wrong in the common wisdom about the politics of that election, about the politics of this year, and about the politics of the next election, the presidential election.

Something in the common wisdom appears to be wrong, and that I think is leading to the pundit class and the Beltway press being really surprised by some stuff that they shouldn‘t necessarily be surprised by, and it‘s also fuzzing up some clear predictions that everybody ought to be able to already make about 2012.

Here is what seems to be wrong in the political common wisdom right now.


UNIDENTIFIED MALE:  How is this—the Tea Party movement, how do they distinguish themselves from the traditional conservatives?

GEORGE WILL, CONSERVATIVE COLUMNIST:  Well, I think they are the traditional conservatives, with, at the moment at least, the social issues stripped away.  These are limited government, Madisonian conservatives of the sort who trace their lineage directly back to Barry Goldwater, without the detour that we took in the ‘70s and ‘80s into deeper involvement in the social issues.

UNIDENTIFIED MALE:  Well, you know, a lot of the Tea Party is just fiscal conservativism, which is a totally positive force.  That was a lot of the message.

CHARLES KRAUTHAMMER, CONSERVATIVE COLUMNIST:  Tea Party has distinguished itself in being almost exclusively about governance, the reach of government, taxation, economic issues.  It‘s not the social conservatives.  In fact, that‘s what distinguishes is.


MADDOW:  Not the social conservatives.  That‘s what defines them.

The whole Tea Party phenomenon emerged in Republican politics after 2008 but before the last elections in 2010.  And when Republicans in 2010 won the House and won a huge number of governorships and won and huger than huge number of legislative seats at the state level in that election, pundit world, the Beltway, decided that that meant social issues were over because the Tea Party drove those Republican victories, and the Tea Party doesn‘t care about social issues.  That, in fact, defines the Tea Party.

Therefore, 2010‘s Republican majorities coast-to-coast must be all about budgets, all about money, all about leaving the gays, guns, and abortion rights alone.

If you have believed that common wisdom, then this does not make sense.  And this at least is a surprise.  Look—before the 2010 elections, before the social issues are over, Tea Party elections of 2010, the most anti-abortion restrictions enacted by states in a single year was 34.

What happened after the “we don‘t care about social issues” class of 2010 got elected?  Look.  Boing!  Eighty different anti-abortion laws, not just proposed, not just passed by a committee or one House, but 80 new anti-abortion laws enacted in the states this year, thanks to that Tea Party election last year, you know, the one where they didn‘t care about abortion anymore.

And that does not include the new abortion bill that passed in Iowa, and that it‘s considered likely to be passed into law there any day now by Republican Governor John Kasich.

The fundamental common wisdom about American politics right now is that the Tea Partiers are driving the Republican Party and that they are fundamentally different than the Republican base has ever been before, they are libertarian, they are isolationists, they are small government, limited government, anti-spending types who just want government off our backs.  That‘s their brand, and they‘ve done a great job selling it.

The evidence we‘ve got, though, in contrast to that brand suggests that whatever they are calling themselves, Republicans now—again, whatever they call themselves, are super anti-abortion.  The evidence we‘ve got is self-identified Tea Party supporters are slightly more in favor of the war in Afghanistan than the rest of Republicans.  They‘ve been only barely more likely than Republican voters in general to see federal government debt as a serious threat to the country.

On this show last night, Wayne Slater, who has been covering the potential presidential candidacy of Texas Governor Rick Perry, as well as the politicking this year in Iowa, Wayne described the Republican base right now that he is seeing as a seasoned political reporter as teavangelical.

I think that is not only a snappy term.  I actually think that‘s much closer than the—much closer to the truth than the common wisdom has been.

However novel the Republican Party wants to be seen as this year, and however much that drives the pundit class to distraction about how different Republican politics are going to be this year, really what Republicans are dealing with is a traditional Republican conservative base this year, that is extra obsessed with abortion.

There is nothing new under the sun.  Maybe the universe is trying to remind us of that by having Newt Gingrich run for something again.

The Tea Partification of the Republican Party, when you look at the evidence, seems like just an upsurge of the anti-abortion, religious right faction that the Republican Party has harbored for a generation now and ignoring the religious and theocratic impulses of the Tea Party movement that‘s supposedly don‘t have those impulses makes things in politics seem surprising that shouldn‘t be surprising.

The fact that the common wisdom is so wrong about the Tea Party I think is just successful, small government rebranding of a movement that is, after all, working very, very hard to radically expand the reach of government so that government makes decisions on millions of pregnancies that did not used to be subject to government control.


MADDOW:  Elections yesterday in Wisconsin, Democrats are trying to recall six Republican senators who voted for Governor Scott Walker‘s union-stripping law.  Yesterday, the Republicans forced the state of Wisconsin to spend about a half million bucks on a Democratic primary election for those recalls to choose Democrats to run against the sitting Republicans.

Republicans forced that primary to occur by running fake Democrats against the real Democratic candidates.  The fake Democrats all lost and lost badly, so these primaries were a pointless waste of taxpayer money.  Thanks, Republicans.

Next up in Wisconsin, the real recall elections of real Democrats trying to unseat those real Republican senators.  That real election is scheduled for next month.

Also in southern California yesterday, the seat of retiring Democratic Congresswoman Jane Harman will stay Democratic, with Democrat Janice Hahn defeating a very conservative Republican challenger.  That was the contest where an outside conservative group unconnected to the Republican candidate ran a spectacularly racist ad against Janice Hahn.

Over the past 12 years, as the blog “Smart Politics” notes today, there have been 192 elections in which the Republican Party has tried to take a California congressional seat out of the hands of the Democrats, 192 straight elections.  Of those 192 elections, Democrats in California have won all 192 of them.

Over that same period, seven of California‘s congressional seats that were Republican have gone to the Democrats.

California in terms of federal office is very, very deep blue.


MADDOW:  The vast majority of the people killed in the 9/11 attacks were, of course, American citizens.  The second most prevalent nationality among 9/11 victims was British.

A former New York City police officer says a British tabloid called “News of the World” contacted him and told him they would pay him to retrieve private phone records of British citizens killed on 9/11.  The ex-officer claims reporters wanted the victims‘ phone numbers and details of the calls they made and received in the days leading up to 9/11.

The phone numbers of the victims, “News of the World” could hack into the victims‘ voice mail to retrieve and publish those voicemails.

The former New York City cop says he turned the tabloid down.

On July 7th, 2005, in the morning rush hour, four coordinated suicide bombings in the London transit system killed 52 people.  The attack is known in England as 7/7.  The family of at least one 7/7 victim was notified last week that their phones may have also been hacked by “News of the World.”

British soldiers killed in Iraq and Afghanistan, their names and contact information and those of their families have also turned up in the notebooks of a private investigator employed by “News of the World.”  The paper is not denying or confirming the investigator hacked into the phones f the dead service members.  But the paper did put out a statement saying that if that did happen, it would be absolutely appalled and horrified.

In 2002, a 13-year-old girl Milly Dowler disappeared in a London suburb.  In the six months between the day she disappeared and the day her body was found, “News of the World” journalists hacked into Milly Dowler cell phone and may have deleted some of her voice mails in order to make room for new ones to come in, hoping that would provide the paper clues to the girls whereabouts.  The paper‘s actions gave the girl‘s family and investigators false hope that the girl was still alive and still accessing her phone.

In 2006, another Rupert Murdoch-owned tabloid paper reported the then-infant son of then-Prime Minister Gordon Brown had been diagnosed with a respiratory disease cystic fibrosis.  Prime Minister Brown and his family had been trying to keep their son‘s health information private and said they were designated by the diagnoses being made public.  And it has been alleged that that information was obtained into the infant‘s medical records.  The paper denied that allegation today.  They say a member of the public voluntarily gave them that information.

The unfolding scandal here is not about one rogue paper.  It appears to be about one huge rogue company.  The story about Gordon Brown‘s infant son was not a “News of the World” story.  It was published by another Rupert Murdoch owned paper called “The Sun.”

Yesterday, Mr. Brown accused a third Murdoch paper, “The Sunday Times,” of employing, quote, “known criminals to gather personal information on his banking, legal files, and tax affairs.”

Beyond the illegal hacking and spying allegations, there‘s also a bribery component here.  “News of the World” editor at the time of the dead child phone-hacking admitted to a parliamentary committee that the paper bribed police officers for information.  The bribery allegations themselves are lurid.  The Murdoch paper paying police officers tens of thousands of pounds in cash for information, sometimes handing over envelopes of cash at a fast food chain drive-thru.

So far, the business and financial implications for Mr. Murdoch and his media companies have been swift.  The 168-year-old “News of the World” tabloid will not see its 169th year.  The paper has been shut down.

Today, Mr. Murdoch‘s company ended its years-long $12 billion effort to take over the British Sky Broadcasting Company.  That news sent the satellite broadcasting company stock tumbling.  Had Mr. Murdoch acquired the company, he would have controlled 40 percent of all commercial television in Britain.

The family that sold “The Wall Street Journal” to Rupert Murdoch now says it regrets doing so.

The business consequences of this scandal are still unfolding, but the legal consequences started unfolding years ago.  In 2007, a “News of the World” editor and private investigator hired by the paper were jailed for the phone hacking, which they admitted to.  The editor, Andy Coulson, denied knowing about the hacking but resigned anyway.  The conservative party and its leader, David Cameron, then hired that editor, Andy Coulson, to be a communications director for them.

Last week, he and another editor were arrested on corruption, hacking and bribery charges.  An editor at “The Guardian” newspaper says he told Prime Minister David Cameron‘s office about Coulson‘s involvement in the scandal at the time Cameron was hiring him.  Cameron denied those charges today in parliament and announced an official inquiry.


DAVID CAMERON, BRITISH PRIME MINISTER:  After listening carefully, we‘ve decided the best way to proceed is with one inquiry, but in two parts.  I can tell the house that this inquiry will be led by one of the most senior judges in our country.  The inquiry will be established under the 2005 Inquiries Act, which means it will have the power to summon witnesses, including newspaper reporters, management, proprietorships, policemen and politicians of all parties to give evidence under oath and in public.


MADDOW:  Here in the United States, Democratic Senators Barbara Boxer, Jay Rockefeller, Frank Lautenberg and Bob Menendez have all called for investigations of Murdoch‘s company by the Justice Department and Securities and Exchange Commission.  The senators say they want to know if Americans had their privacy invaded, and whether or not any U.S. laws were broken.

In the House, Republican Peter King of New York has asked the FBI to investigate whether News Corp journalists tried to get ahold of 9/11 victims‘ phone numbers.

A journalist at “The Guardian” which spent years reporting on this story has promised the “Associated Press” that we do not yet know everything there is to know about this scandal, that there is more to come.  The outstanding questions at this point are whether or not this scandal, frankly, has potential to bring down the British government and whether it also may rock the Rupert Murdoch media empire around the world and here in the U.S., where it includes not only the dominant business newspaper in the country, “The Wall Street Journal,” but also the dominant media voice of the Republican Party and conservative politics, in the FOX News Channel.

Joining us now to lend us some legal perspective on this is Jay Fahy.  He‘s a former federal prosecutor and district attorney with extensive experience in bribery cases and extradition cases.  He currently works as a defense attorney in private practice.

Mr. Fahy, thanks very much for your time.


MADDOW:  Can you break down potential charges News Corp might be facing, either here or abroad, whichever you think is more important?

FAHY:  If we look to a broad hacking into the phones in Britain is the charge, that‘s the most outrageous charge, I think, but it is not the most serious charge.  There‘s been bragging in this case that detectives from Scotland Yard were paid in excess 100,000 pounds, at different points in time sums up to $10,000.  Those are the most serious criminal charges we‘d see in Britain.

How does it affect us in the U.S. is a great question, and we have a Foreign Corrupt Practices Act, which in some substance says that if you have a publicly traded company, and News Corp is traded on the NASDAQ, and that company is involved with bribing foreign officials, that being detectives at Scotland Yard, it‘s a violation of that act.  We most frequently see that act being prosecuted with companies opening up plants or supply lines in third world countries and the brother of a prince or the son-in-law of a queen gets a contract, and it‘s basically a bribe.  But it‘s something that‘s prosecuted here mostly with large corporations doing things like that.

But the facts do fit for News Corp if they bribed people at Scotland Yard to prosecute them in the U.S.

MADDOW:  How serious is the violation of a Foreign Corrupt Practices Act?  Is that a sort of thing that a company just pays a fine and it goes away, or is it the sort of thing that could have more existential problems for a company?

FAHY:  It could have more existential problems.  People could go to jail depending on how high you can show that there was authorization to violate the act.  But the corporation could be put into a monitorship for a period of time as we‘ve seen with some of the Wall Street companies over the years.

They could actually make the company—have the company lose its charter if they wanted to.  But I‘d like to move away from the criminal for just a second.  Our Federal Communications, our FCC has also incredible powers in this area.

From time to time, Murdoch has to come before the FCC for the licensing that he has.  He has 27 television stations besides—forgetting about cable for a moment, 27 other TV stations that has to get FCC approval from time to time, and one of the standards for that is you have to be of good character.  Now, a scandal like this, not just the scandal, but proofs of bribery and of hacking in England would have enough to question whether that is good character and whether he would keep those licenses.  And that would completely destroy his financial empire if we went that far.

MADDOW:  And that would explain the focus on whether or not this is a “News of the World” problem, a rogue editor, rogue paper problem, or whether or not this is a systemic means of doing business in the company, right?  His character is explained whether or not—in part by whether or not this is the way he understood his companies to do business.

FAHY:  That‘s exactly right.  And large companies, whether he was involved knew or not is a different issue, but if we look at companies like Exxon, often times they try to throw someone out in front to take the responsibility, to take the blame and to deflect things if the whole institution is corrupt.  We have yet to see whether the whole institution is corrupt.  But if it is, there are a lot of serious penalties that he could be facing in the United States.

MADDOW:  Do you expect any American investigation, whether it‘s in the Senate or by the FBI, as the Republican congressman is calling for, or by the FCC, by SEC, any of those investigations.  Do you expect that they would chronologically wait until the British investigations are done, sort of take a back seat to what the Brits are doing?

FAHY:  We have FBI agents in Britain that are assigned to our embassy there that coordinate with the British.  I suspect—the answer is we will be cautious.  I don‘t—we are not going to wait completely.  I‘m sure that the attorney general of the United States, Eric Holder, is talking this out with his people right now as to what they should do, what they shouldn‘t do.

I would also suspect that—since four prominent senators have asked for inquiries, they are going to start something in the U.S. Senate pretty quickly.  And the FBI—the FBI has the power to go in, look at records.  This is a publicly traded company.  The SEC has also been called upon to make inquiries.

And the real big question is if these bribes did occur to detectives at Scotland Yard, where did the money come from?  Was it paid in Britain?  Was it paid through subsidiary here?  It‘s kind of a follow the money thing.

MADDOW:  Yes, who green lit that money?

FAHY:  And it‘s often hard for large corporations to hide cash and not see cash in obvious places.  These are not cash businesses that he‘s in.

MADDOW:  Jay Fahy, former federal prosecutor and district attorney, now a defense attorney, it‘s very helpful to me to have your insight on this—thanks a lot.  I really appreciate it.

FAHY:  Thanks.

MADDOW:  On “THE ED SHOW” tonight, Ed goes the full Minnesota on Michele Bachmann saying that Social Security checks won‘t be jeopardized if we hit the debt ceiling.  That‘s coming up on “THE ED SHOW.”

Next on this show, I go full Minnesota on Minnesotans losing all access to beer.  That is coming up next.


MADDOW:  “Debunktion Junction,” what‘s my function?

All right.  First question, true or false?  The government shutdown in the great state of Minnesota is about to deprive Minnesotans of beer.  Minnesota running out of beer because of the state government shutdown—is that true or is that false?

True.  The Minnesota state government has been lights out since July 1st because the legislature wants a budget deficit that‘s big on spending cuts.  The Democratic governor wants a mix of cuts and taxes on people who make more than $1 million a year.

When the Minnesota government is open, one of the things it does is it regulates the sale of booze.  If want to buy booze wholesale and sale to the public, you need a license to do that.  That‘s why you see little kids having corner lemonade stands and not corner keg stands.

But with no government workers around to deal with those licenses, Minnesota‘s bars and restaurants whose permits to sell booze are expiring while the government is shutdown have no way to renew them.  And so they will soon be pulling on dry taps.

And that‘s not all.  Another booze related thing the state does is approve the labels of booze that is sold in the state.  You have to register the label with the state every three years.  The Miller Coors Company accounts for nearly 40 percent of beer sales in Minnesota with brands like these.  Minnesota says the label renewal for all these brands does not get done before the shutdown, and so now, all Miller Coors products have to be pulled off the shelves in Minnesota immediately.

No more Coors, no more MGD, no more Hamm‘s, no more Killian‘s Irish Red, no more Old English 800, not in Minnesota, not if the government is shutdown.  They‘re even taking away Keystone Light.

And ready for more?  Distributors say they are running out of the tax stamps they put on cigarette packets, too.  And as long as the government is shutdown no new tax stamps for cigarette packs, and so, no more cigarette sales in Minnesota.

They say if this keeps going toward Labor Day, you may not be able to buy cigarettes in Minnesota at all.  Last call!  Wow.

All right.  Second question, true or false—our great nation has 50 states like you see right here, like they teach you in school.  The United 50 States of America, is that true or false?

False apparently maybe.  North Dakota—seriously, North Dakota, we have to talk, the rest of us, the other 49, even Texas, we are all in this together.  But you, North Dakota, not so sure.  A report out of Grand Forks says the state constitution in North Dakota conflicts with the federal constitution when it looks at what officials need swearing in.

A North Dakotan John Rolczynski, who is 82 years old now, spent 16 years trying to point this out to his fellow citizens.  His point goes like this.

Article Six of the U.S. Constitution requires that members of the several state legislatures and all executive and judicial officers, both of the United States and of the several states, shall be bound by oath or affirmation to support this Constitution.

But the North Dakota Constitution in its Article 11 calls for lawmakers and judges to take the oath of office.  Lawmakers and judges only, no mention of the executive branch.

Oh!  So, even though the North Dakota governor does also take the oath, he‘s not required to by the state constitution.  Even though the U.S.  Constitution says he must be.  And this presents a problem.  Under our federalist system, the federal Constitution wins in a conflict like this.  And that might mean North Dakota is not really a state.

I‘m not sure what to make of all this yet, but thanks to Mr.  Rolczynski, the people of North Dakota gets a chance to fix things up.  If the constitution that made them a state  wasn‘t valid, they need to fix that constitution to make themselves a state now.  Next November, they will vote on an amendment to have the executive branch take the oath as well.

If the amendment fails, then North Dakota might still just be a territory as it possibly has been all long.  Of course, maybe then, they could sell beer and cigarettes to the poor suckers across the territory border in the sad, sad, sad state of Minnesota.


MADDOW:  Last night in Phoenix, it was Major League Baseball‘s all-star game, sort of a game, sort of a pageant.  It‘s an exhibition.  So, it‘s more pomp than circumstance.  But they played the national league one and just as it does every year, the all-star game gave way to nothing.  No games of any of the major sports leagues.

The day after the all-star game is annually notorious as the sleepiest sports day of the year.  It is so vacant that ESPN puts on its made-up awards show on this day, a modern life, sure sign of a vacant vapid lack of consequence.

The day after the all star game is such a dead day in sports that the very vulgar and very funny today led with a made-up list of the 100 worst players ever—their anti-award show.

The day after the all-star game is bleak Wednesday in sports every year.  Not this year.


MADDOW:  This year, in a nation that does not care about the game of soccer—this year, in a nation still trying to convince itself it cares about any women‘s sport of any kind, this year, the amazing spectacle that is the U.S. World Cup team made bleak Wednesday a great sports day after all.

After the U.S. beat Brazil on Sunday, today, we had to get through France.  All right?

The U.S. is in white here.  The Frenchies are in blue.  The U.S. takes an early lead with this ball here from Lauren Cheney.  No relation.

But then the Frenchies fight back, tying the match at 1-1 when this long shot eludes our goal keeper Hope Solo.  And there it stood late into the second half, win here and go to the World Cup finals or don‘t.  It‘s tied 1-1 and that‘s when on the slowest day of every sports year, “The Best New Thing in the World” happens.

Watch this—even if you hate soccer—watch this.


MADDOW:  Abby Wambach again, who had the beautiful goal on Sunday—she does it again.  She is enormous.  She is unstoppable.  Holy Mackerel!  She broke the twitter.  And the U.S. is up 2-1.

And then the nail gun full of nails into the coffin, it‘s going to be 3-1 for the final score, after Alex Morgan scores this one too with syncopated stutter stepping that would put Fred Astaire to shame.

For the first time in 12 years, the United States of America is going to the World Cup finals, 2:00 p.m. Eastern Time Sunday against Japan.

Bleak Wednesday, my foot.  On what is supposed to be the most sports-

less day of the year, sports worth caring about, even if you hate sports,

even if you don‘t care about soccer, even if you don‘t care about any of it

it‘s so awesome.  “Best New Thing in the World Today.”


That does it for us tonight.  Now, it is time for “THE ED SHOW.”  Have a great night.



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