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'The Rachel Maddow Show' for Friday, January 27, 2012

Read the transcript to the Friday show

Guests: Karen Tumulty, Eric Schneiderman, Paul Rieckhoff

RACHEL MADDOW, HOST: Good evening, Ed. I`m sorry that last night, I
was in a space suit and could not say hi back to you at the top of the

ED SCHULTZ, "THE ED SHOW" HOST: You know what? That`s OK. I
thoroughly -- thought it was more than innovative. I thought it was
terrific. And when I got home, Wendy said you won`t believe what Rachel
did. I said I have an idea. It was great.

MADDOW: Innovative is a very kind way to put that, Ed. I appreciate
that. Have a great weekend. Good to see you.

SCHULTZ: You, too. Thank you, Rachel.

MADDOW: All right.

Thanks to you at home for staying with us for the next hour.

No space suit tonight, I promise. Maybe Monday.

Do you remember when Bob Dole did a Viagra ad, I started to think that
was sort of a apocryphal, that everybody thought Bob Dole did a Viagra ad,
maybe he actually didn`t because you can`t find that ad anywhere. You can
find people writing about the ad but the ad itself is like not obvious on
YouTube. It`s not that easy to find.

I started to think that maybe Bob Dole doing a Viagra ad was kind of
like saying Sarah Palin saying, "I can see Russia from my house." Sarah
Palin never said that, right? It was something that was used as a joke
against her on "Saturday Night Live," but we all talked ourselves into the
idea that she really did say it.

So, starting to think this was the same thing. It turns out -- no.
Bob Dole did a Viagra ad. We finally found it. God bless the NBC


BOB DOLE, FORMER U.S. SENATOR: Courage, something shared by countless
Americans, those who risk their lives, those who battle serious illness.

When I was diagnosed with prostate cancer, I was primarily concerned
with ridding myself of the cancer. But secondly I was concerned about
possible post operative side effects likely recommend erectile dysfunction,
E.D., often called impotence. You know, it`s a little embarrassing to talk
about E.D., but it`s so important to millions of men and their partners
that I decided to talk about it publicly.


MADDOW: The Bob Dole Viagra ad, it exists. It came out in 1999.

The last time there was a Democratic running for reelection and
Republicans were trying to unseat that president, that was 1996. It was
the end of Bill Clinton`s first time.

And if you recall, Bob Dole was that year`s Mitt Romney.


DOLE: When they say Bob Dole wants to raise taxes, and I`ve got a
record of carrying the ball for Ronald Reagan, that`s not accurate.


MADDOW: Bob Dole who got sort of famous in that campaign for
referring to himself as Bob Dole -- lost to Bill Clinton badly in 1996. He
lost to President Clinton by 8 million votes.

And after that electoral drubbing he got, there have been two
surprising and interesting things about Bob Dole in American life post-
losing for president. Number one, the Viagra ad.

The Viagra ad was so amazing that Mr. Dole later did a Pepsi ad making
fun of his own Viagra ad.


DOLE: I`m here to tell you about a product put real joy back in my
life. It helps me feel youthful and vigorous and most importantly, vital
again. What is this amazing product? My faithful little blue friend. An
ice cold Pepsi-Cola.

UNIDENTIFIED MALE: Are the revitalizing effects of Pepsi-Cola right
for you? Check with your local convenience store counter clerk and start
living again.


MADDOW: I love the fake doctor guy.

So, Bob Dole losing the presidential election in 1996, then becoming a
Viagra pitchman. That was the first surprising thing about him, in
American life after he lost to Bill Clinton in 1996.

The second surprising thing about him, is happening right now. It is
his unexpected emergence as the strange factor in this year`s presidential
race. In 1996, Bob Dole had to fend off a challenge in the Republican
primary from the often wrong but never in doubt Pat Buchanan. This year,
Mitt Romney is trying to fend off a challenge from the often wrong but
never in doubt Newt Gingrich.

And Bob Dole has decided to weigh in, obviously, on behalf of the guy
who`s playing him in this year`s remake. He`s on Mitt Romney`s side of
course. He`s against Newt Gingrich.

Now, the context here is a little weird but you have to know this in
order to understand what`s so strange about what Bob Dole is doing right

In 1996, when Bob Dole was running against Bill Clinton, Newt Gingrich
was speaker of the House. Republicans won the big term election against
Bill Clinton and the Democrats in 1994. So, by the time, Bob Dole is
running for president in `96, Newt Gingrich was really the most famous
Republican in the country. He was speaker of the House.

And he used to carry a bucket around with him everywhere. Here`s with
why. Apparently there had been a long standing practice in Congress, for
whatever reason, that the office of every member of congress every day got
a bucket of ice delivered in the morning. They always had done this in
Congress and still did it back in the 1990`s. I find it kind of charming.

Newt Gingrich found it wasteful which it obviously totally was
wasteful. And Newt Gingrich as speaker put a stop to the ice delivery
tradition while he was speaker. He was so pleased with himself for doing
that he carried a bucket around with him everywhere, to remind everybody
that he had cut that wasteful thing.

That`s the relevant context for what happened yesterday. Yesterday in
the midst of the new waive of Republican establishment piling on to defeat
Newt Gingrich, the Romney campaign released a statement about Newt Gingrich
from Bob Dole. This is yesterday.

Quote, "I have not been critical of Newt Gingrich, but it is now time
to take a stand before it is too late. Hardly anyone who served with Newt
in Congress has endorsed him and that fact speaks for itself. Gingrich had
a new idea every minute and most of them were off the wall.

In my run for the presidency in 1996, the Democrats greeted me with a
number of negative TV ads in every one of them, Newt was in the ad. He was
very unpopular and I`m not only certain this did not help me, but that it
also cost House seats that year. Newt would show up at the campaign
headquarters with an empty bucket in his hand -- that was a symbol of some
for the for him -- and I never did know what he was doing or why he was
doing it, and I`m not certain he knew, either." Meow.

The Gingrich campaign has now responded to Bob Dole by saying, "It`s
got to be on the to be 10 list on the weirdest things Bob Dole has ever

Do you know what else is on that Mr. Gingrich`s spokesperson told
"Talking Points Memo" that it was strange that Bob Dole would criticize
Newt Gingrich specifically for the bucket thing, quote, "They were still
under Bob Dole`s leadership, mind you, delivering a block of ice every day
to the congressional offices like it was the 1800s. Newt said that`s a
dumb idea and we should stop. Bob Dole thinks cutting spending is a very
weird thing."

But then, the stinger from the Gingrich camp -- an anonymous pro-
Gingrich D.C. person also tells "TPM" today in the same article, "Governor
Romney isn`t strengthening his case to conservatives by toting endorsements
by two moderate Republican presidential nominees who both lost their
elections, Senator McCain and Senator Dole." Ow! That hurts.

And it`s true. I mean, right. Bob Dole and John McCain both lost.
They are both big touted endorsements by Mitt Romney right now.

There are two main things going on in the Republican presidential
nominating process. I mean, there`s also sideline things. There`s a
question of, you know, when Rick Santorum is going to get out of the race,
here`s the question of why Ron Paul is amassing all these delegates and
what he wants to do with those delegates, once he gets them -- there are
sideline issues.

But the main two things going on are these: The Republican
establishment is pulling out all the stops to kill the Gingrich candidacy
and the Gingrich candidacy keeps exposing new and very real weaknesses in
Mitt Romney as a candidate. Pick a conservative establishment news outlet,
pick one, any one, they were all busy absolutely slamming Newt Gingrich.

Look how the "Drudge Report" did this today. There`s me on the right.
They`re making fun of me because nobody recognized me on "Jeopardy," which
I thought was hilarious. But, anyway.

In the little box there on the left side there, in the same little box
on the front page of the Drudge Report, the smiley happy picture of Mitt
Romney and his handsome son, and his wife, who apparently, quote, "Wowed
the crowd at Hispanic conference." Immediately under that item, dark sad
picture of Newt Gingrich with his back to the camera looking like he`s
maybe at a funeral. While Ann Romney was wowing that crowd, look at the
Drudge caption "Callista remains silent."

Over at the "National Review Online," there was this -- "Newt and the
earmark era." And do you know Newt? He`s sometimes sounds like Obama.

Right over their article Dole nukes Newt, the aforementioned. You get
this one -- Romney should be proud his wealth isn`t a problem.

At the "Washington Examiner," they turned it up to 11, Newt Gingrich
is a Saul Alinsky Republican. Presumably that one goes on to note how Mr.
Gingrich is secretly Kenyan.

Then there`s conservative "American Spectator." Here`s what they were
headlining, "Newt`s Rubio rumble." A rising star, meaning Mr. Rubio, puts
the Gingrich candidacy in its place.

Transparent much, you guys? Come on.

So, you got the entire Republican establishment, all Republican
establishment media, all just killing Gingrich. And once again, the Newt
push back in terms of his surrogates and people sticking up for him in the
conservative media, they`re trying but it is comparatively puny.


what`s going on with him? Via the establishment attacks, they are crucify
this man, rewrite history and what he has stood for, not just Ron Paul, I
believe it`s also Newt Gingrich that the establishment, that the liberal
media, certainly the progressives and Democrats don`t like.


MADDOW: I mean no disrespect here, Governor Palin, but the
progressives and Democrats really, really like Newt Gingrich. I mean, not
like they would vote for him. But if progressives and Democrats could vote
in the Republican primaries, that`s probably would they would vote for.

Have you seen the head-to-head numbers recently? Barack Obama is
beating all the main contenders right now in the head-to-head match-ups.
But Newt Gingrich does the worst out of any of them, even Rick Santorum
fares better against President Obama than Newt Gingrich does.

So, Governor Palin, you are right there is an establishment attacking
Newt Gingrich, but it`s not my establishment. It`s not the liberal
establishment attacking Newt Gingrich. It`s your side.

But you know, the Republican establishment has tried to kill Newt
Gingrich before and in South Carolina, with all the super PAC money that he
had behind him, Gingrich was able to sort of ally to the criticism. He
beat Romney badly and he took some serious hide off Romney heading forward.
Even though there was a ton of criticism of it, Mr. Gingrich`s super PAC
ran that half hour long ad called "King of Bain," right, a brutal attack on
Mitt Romney supposedly great asset, his business career.

And now, it turns out that they are not just repeating those same
attacks they used in South Carolina against Mitt Romney, tonight they are
premiering another long form documentary style attack ad on another issue
about Mitt Romney, essentially accusing him of being part of a massive
fraud in his Bain days.

They put out this trailer for their hit piece this afternoon, ahead of
the release of the film, calling it "Blood Money" apparently.


NARRATOR: With the Medicare, the government says con artists are
draining the life blood out of it by filing millions of dollars in phony

with the government like Medicare, Medicaid?

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: We didn`t do any work with
the government.


MADDOW: Coming soon. That trailer will reportedly begin airing as a
TV ad in Florida.

The Republican establishment desperately wants Newt Gingrich to
disappear. They apparently do not understand why he persists, why he keeps
sticking around, who is the guy with the bucket any way, right? Can`t we
make this guy go away?

But Newt Gingrich is sticking around. Newt Gingrich has a message
here. He`s a message guy. And for a country that is transfixed with the
race between him and Mitt Romney, he is doing more than anybody else in the
country right now to define who Mitt Romney is.

Joining us now is Karen Tumulty. She is the national political
correspondent for "The Washington Post," reporting from South Florida.

Karen, thanks for being with us.

KAREN TUMULTY, WASHINGTON POST: Well, thanks for having me.

MADDOW: You probably remembered the bucket story, I was very happy to
go back and figure out it was about ice deliveries.

TUMULTY: Yes, he did a lot of things. He got rid of the House barber
shop. He -- I believe he may have also fired the House historian. So
there were a lot of things that Newt Gingrich was doing back in those days.

MADDOW: Well, he`d just take care of that in-house. He`s a very
well-compensated historian, you may have heard.

The pro-Newt Gingrich super PAC is reportedly planning to go buy air
time for this anti-Mitt Romney Medicare, sort of pseudo-documentary. What
do you foresee as being the impact of that?

TUMULTY: Well, you know, I`m not really sure, because remember that
this is a state that elected a governor and in fact he was the Tea Party
candidate, elected a governor, who himself had been accused of running a
company that was accused of Medicare fraud.

So, I don`t know how far this takes him. And I also think that just
the whole headline "Blood Money" takes us over the top. But just the
whole, it is sort of one of the more interesting things we`ve seen this

I mean, here is this guy who is in Congress for close to a quarter
century. He was the speaker of the House. He was one of the most popular
surrogates out there on the campaign trail for everybody, and he`s not the
establishment. So, it`s been a real sort of funny empire strikes back kind
of drama going on.

MADDOW: I feel like that the analysis the blood money thing is a
little too far, a little too much, sort of applies in all politics, except
for right now, politics right now. It`s hard for me to imagine something
being seen as too over the top given the way that these guys have been
talking and going at each other.

I mean, didn`t Mr. Gingrich say today that Mr. Romney was the like
most dishonest presidential candidate ever in American history?

TUMULTY: In an interview with my colleague Amy Garner at the
"Washington Post," he said that what Mitt Romney did to him last night
during the debate was the most dishonest thing he had ever seen in
presidential politics. Now, mind you, this is a man who is old enough to
remember Watergate. So it was a pretty extraordinary statement.

MADDOW: Karen, in terms of the Republican establishment, we are
seeing Marco Rubio complaining a little bit about Newt Gingrich, but
neither Marco Rubio nor Rick Scott, the Medicare fraud-tainted Florida
governor, nor Jeb Bush, a very popular former governor there in Florida,
they are not endorsing anybody.

If the establishment is so squarely behind Romney, and so anti-Newt
Gingrich, why isn`t the Florida Republican establishment doing that same

TUMULTY: Well, first of all, they haven`t officially endorsed Romney,
but both Rubio and Jeb Bush, who is basically a saint to the conservative
movement, have issued statements that were supportive of Romney.
Essentially they defended Romney against Newt Gingrich`s characterization
that he basically has the same team that ran Charlie Crist`s campaign for
governor here. Charlie Crist, of course, was a Republican incumbent, who
had to become an independent because he was going to be defeated on his own
ballot. So they have done some things that are supportive of him.

But I think quite frankly that what you have here in Florida as you
have all over the country is this very deep divide within the Republican
Party, between the establishment and the insurgent Tea Party forces -- and
Marco Rubio is the Tea Party`s guy. So, the last thing I think he wants to
do is get in the middle of this fight.

MADDOW: Karen Tumulty, national political correspondent for "The
Washington Post," thank you for your time tonight. Enjoy these last few
days in Florida. I have a feeling it`s going to get more fun and not less.

TUMULTY: Thanks a lot.

MADDOW: Appreciate it.

Hey, great news, turns out there is a crack in the dam, in terms of
prominent elected Republicans refusing to come on this show. I think we`ve
got a line on a good one. The way we got a line on a good one is very,
very strange. I`ll explain that in just a second.



MADDOW: This is as close as I`ll get to interviewing Liz and Dick

Hi, Rachel Maddow.


BILL WOLFF, TRMS EXEC. PRODUCER: We said we`re here, we`d love to
speak with Ms. O`Donnell or any representative of the campaign.

MADDOW: Like getting bounced from a bar.

We have asked Sarah Palin to come on the show I don`t know how many
times. And she has never agreed to come on.

Our booking producers have been calling Liz Cheney and asking her to
come on the show and discuss her ideas, debate the issues, for months.

Every time we`ve asked Scott Brown do come on the show, he said no.

Former governor and former presidential candidate Tim Pawlenty is
going to be here at MSNBC tonight, right here on MSNBC, but not talking to

Say yes Christine O`Donnell. It will be fun, I promise.

Say yes, Sharron Angle, you will get a fair shake, pinky swear.

Say yes, Sarah Palin, you have our number, I know you do.

Ken Buck, come by any time. Joe Miller, I would love to talk to you.

Liz Cheney, door is always open, to anybody in your family actually,
any Cheney, any time.


MADDOW: We`re on our way to the Jon Huntsman event right now. We`ve
heard from the Jon Huntsman campaign, no. No way, no chance, never.

UNIDENTIFIED FEMALE: They told you no.

MADDOW: They have told us no, don`t try to get close.

UNIDENTIFIED MALE: The old campaign end around.

MADDOW: I know.

I was getting no where near this supposed Rick Santorum surge.

Mr. Huntsman or Mr. Romney, if either you would like,
it`s yours, seriously, for free. I would be happy to give it to either one
of you in person. If you`re free one weekday night in the 9:00 hour
perhaps, I could give it to you here. You know where to find me.


MADDOW: Suffice to say I have a hard time getting Republican
candidates to agree to come on the show. Requests are in, to everybody,
all the time but I`m not getting anybody ever.

However, looking down the road at potential vice presidential
prospects for 2012 this week I was given an inkling of hope. The person
who give me this inkling of hope is conservative talk show host Laura

This is amazing. This is Laura Ingraham talking with one of the guys
who everybody says who is on the vice presidential short list, Virginia
Governor Bob McDonnell.



on YouTube, governor, and I was watching some of Reagan`s old debates from
the `60s, late `60s, early `70s, there wasn`t a place he wouldn`t go to
argue the conservative message and advocate for conservative principles.
And he got a lot of grief for it, but he also -- he won a lot of respect.
And it seems to me that if we have Republicans out there coming up through
the ranks who are concern about going Rachel Maddow`s show or, you know,
concerned that she`s going to get the better of him or her in a sit-down,
then we have real problems.

We have to be able to engage with these people, doesn`t mean you`re
going to convince her but means you`re going to probably be a stronger
advocate across the board to people who don`t really know what conservatism
even is.

GOV. BOB MCDONNELL (R), VIRGINIA: I couldn`t agree with you more,
Laura. That`s exactly right. See if you can get Rachel to set that up for

INGRAHAM: Yes. I will send her a note for sure.


MADDOW: And she did. She sent me a note, or her producer did, which
was very nice.

So, Laura Ingraham, thank you.

Bob McDonnell, even though I think you just called me `lil Rachel
there, I`m still totally looking forward to it. So that we`re all above
board and no suspicion of ambush here because I really want this to happen
in the interest of full disclosure here, Governor McDonnell, since we have
never before have the privilege of having you as a guest on this show, I
want you to know, here is what I have been saying about you on television
without you, here are some of things that might come up in our interview.


MADDOW: Thanks to Bob McDonnell`s overt action, his overt order in
this case, you can be asked what your sexual orientation is in a job
interview in Virginia and your answer can legally be the reason you don`t
get the job.

His grad school thesis condemned cohabitators, homosexuals or
fornicators, and said public policy should be directed against those

Bob McDonnell, the Republican governor of Virginia, putting out the
proclamation on Confederate History Month that makes no mention of the fact
that slavery had something to do with the Confederate cause.

Virginia Governor Bob McDonnell made this proclamation about
importance of Virginia seafood in the same week that he called for oil
drilling off the coast of Virginia to begin as early as next year.

Bob McDonnell of Virginia, the great milquetoast hope.

Virginia governor Just say no to fornicators Bob McDonnell.

The conservative hero governor of Virginia.

You can either take too credit for your balanced budget and stop
talking smack about the stimulus money that got you that balance budget, or
you can refuse to take the credit for the balance budget because you don`t
like how you didn`t earn it.

Why raise the debt ceiling I don`t a see a reason to do it, so says
the governor of Virginia. Trying to get something in exchange for it. But
if you can`t.

Again, quote, "cohabitators, homosexuals or fornicators," I`m all

I`m quoting there about the fornicators, it`s not me describing people
as fornicators. I wouldn`t say that. That`s what Bob McDonnell said.

Not only is that not "leave me alone" small government conservatism,
that is big government crusade against the fornicators conservatism.


MADDOW: Now that Governor McDonnell has told conservative talk show
host Laura Ingraham that he would like to be a guest on this show, I got to
say, Governor, I couldn`t be more excited to have you here.

We`ll try to set something up for next week. I hope that works for
you. I will have my people call your people, or whatever. As you can
probably tell, you should know I think you would be a horrendous choice for
vice president -- I have to tell you. But if you would like to bring along
the candidate you`ve endorsed for president, Mitt Romney, to back you up,
to help make the case for you as V.P., that`s OK with me. He could come
and do an interview as well. I would talk to you both at once or
separately, it`s up to you. I can`t wait.

Laura Ingraham, I owe you. Thank you.



to understand: your president and your first lady were in your shoes not
that long ago. We didn`t come from wealthy families. The only reason that
we were able to achieve what we were able to achieve was because we got a
great education. That`s the only reason. And we could not have done that
unless we lived in a country that made a commitment to opening up
opportunity to all people.


MADDOW: The president today in Michigan, announcing plans to
incentivize college to keep tuition rates low. Tuition and student loan
reform, these are not the kinds of knockout fights, red versus blue issues
that Sunday shows love to prognosticate about, or that the Beltway media
love to cover like they`re boxing matches. Talking about making college
less insanely expensive, it`s the kind of thing that the political class
doesn`t much notice, but if progress could be made on that, it would be a
huge deal for millions and millions of American families and millions of
American futures.

On another potentially huge deal for American families and American
futures, the president really did pick a very big fight and picked it with
Wall Street. That story is next. You will probably want a seat belt for


MADDOW: Some good news today. Good-ish news at least.

Look, this chart was posted on our blog by the great and good Steve
Benen, who now blogs here. Steve`s arrival is the latest addition to THE
RACHEL MADDOW SHOW`s staff as my own personal Christmas in January. It`s
very exciting.

But as you can se from Steve Benen`s chart here, the good news, the
economy is growing, a little. We`re on the positive side of zero. That`s
what the last bar on the right means.

Back here, back that part at the end of 2008, start of 2009, that`s
when Wall Street blew up and it seriously seemed like the world might, too.

It was about that time, three years ago, January, 2009, as the wave of
that economic disaster was crashing down on us, that Congresswoman Marcy
Kaptur of Ohio got up on the floor of Congress and said something that will
be in the history books forever.

When the story is written of how America survived the worst economic
disaster to befall us since the Great Depression, what Marcy Kaptur said in
Congress, that January 15th, 2009, will be part of the history as it is


REP. MARCY KAPTUR (D), OHIO: So why should any American citizen be
kicked out of their homes in this cold weather in Ohio, it`s going to be
10, 20 below zero? Don`t leave your home, because you know what? When
those companies say they have your mortgage, unless you have a lawyer that
can put his finger or her finger on that mortgage, you don`t have that
mortgage. And you`re going to find, they can`t find the paper up there on
Wall Street.

So I say to the American people, you be squatters in your own homes.
Don`t you leave, in Ohio, in Michigan, in Indiana, in Illinois, in all
these other places where people are being treated like chattel, and this
Congress is stymied.


MADDOW: Stay in your homes, don`t you leave. Make the bastards at
the banks drag you out by the heels.

What Marcy Kaptur was saying that day was in part pure catharsis,
right? But she was also making a quite sophisticated legal argument.
They`re not going to be able to find the paper down there on Wall Street.
She was making that argument years ahead of almost everybody else in


KAPTUR: When those companies say they have your mortgage, unless you
have a lawyer that can put his finger or her finger on the mortgage, you
don`t have the mortgage. And you`re going to find they can`t find the
paper up there on Wall Street.


MADDOW: Marcy Kaptur, it turns out, was right. In order to create
their personal gargantoloid (ph) fortunes from trading other people`s
houses, Wall Street first had to devise a way to bundle zillions of
mortgages together so they can bet on them and buy them and sell them in

One house, that`s a deal between you and your bank. That can take
months to finish up. Ten thousand houses, that`s something Wall Street can
flip in a New York instant. But when Wall Street did that, when they
created those bundles, they broke the link between your one house and the
bank you borrowed money from to buy the house. And it turns out the
implications of that one simple little fact are astounding.

In January, 2011, two years after Marcy Kaptur speech that we just
played, the Massachusetts Supreme Court ruled that the banks had no right
to foreclose on two homes, the court decided those loans were shuffled
around so many times around so many times among many investors that nobody
knew who had the right to kick the homeowners out if they stop paying.

Financial blogger Felix Salmon looked at the case and wrote, quote,
"Anybody who was foreclosed on in Massachusetts should be phoning up their
lawyer and trying to figure out if the foreclosure was illegal. If it was,
then the borrower should be able to get their deed and their home back from
the bank."

So, Marcy Kaptur was right three years ago. They can`t take your

If you`ll around, you`ll see cases like the one in Massachusetts
popping up everywhere. This month in Nevada, the state Supreme Court
considering the case of Andrew and Loretta Davis, who said their mortgage,
too, does not legally belong to the bank that`s trying to kick them out of
the house. If they win, thousands of Nevada families will have reason to
ask whether the banks had any right to kick them to the curb, too.

And while we just got another sign that Marcy Kaptur was right, this
time, it came from a different place. After years of federal prosecutors
around Wall Street trying to find a way to assign blame for the Wall Street
disaster that ate the whole country`s economy, President Obama announced
this week that he is ready to look at what Wall Street did to Main Street
as a potential crime.


OBAMA: And tonight, I`m asking my attorney general to create a
special unit of federal prosecutors and leading state attorney generals to
expand our investigations into the abuse of lending and packaging and risky
mortgages that led to the housing crisis. This new unit will hold
accountable those who broke the law, speed assistance to homeowners and
help turn the page on an era of recklessness that hurt so many Americans.


MADDOW: Today, Attorney General Eric Holder announced that he has a
working group ready to go forward to do what the president is asking, sort
through what Wall Street did in betting on average American homes and to
put the bankers on trial wherever the evidence warrants prosecution.

We are now almost three years removed from Marcy Kaptur`s plea to
families to have confidence that the law will protect them even as the
banks come to get them.

A scene like this one, a foreclosed home, the family who used to live
here, gone God knows where, a scene like this is definitely tragic. It can
be enraging. But is this also a crime scene, like a mugging or an assault?
Could this also be a crime?

Joining us now for the interview is Eric Schneiderman. He is the
attorney general of the great state of New York. He`s the leader of the
president`s new financial crimes unit.

Mr. Attorney General, thank you for being here.


MADDOW: In terms of the president`s language, what he said was
expanding our investigations into the abusive lending and packaging of
risky mortgages that led to the housing crisis. People who have not been -
- have not been following this issue closely may not understand the
specifics how should we understand what you are tasked to do?

SCHNEIDERMAN: Our working group is going to dig in to all of the
conduct that blew up the economy. It`s not really a secret. I spent 15
years representing folks in financial services, Wall Street firms, everyone
knows what happened.

The market went up, the housing market went up and ordinary market
circumstances it would have come back down, but they were making so much
money with the bundling of mortgages and mortgage-backed securities, that
they sliced up and sold to pension funds and mutual funds and investors all
around the world was just hard to let go of. So, you can see from you go
to 4, 5, 6, standards for loans going down. People as the president said
didn`t understand and shouldn`t have taken on the loan.

The number of no documentation loans, negative amortization loans,
where you`re paying every month, but you owe more principal going up from
3, 4, or 5.

So, we know what happened. We know what created the bubble and we
know what created the crash. It was not an earthquake, it was not a
natural disaster, this was a man-made disaster.

And our task force is now given both the charge and the resources and
the jurisdiction to go in and figure out exactly what happened, and hold
anyone who was responsible accountable.

MADDOW: If as you say it`s not a secret if the basics are understood
about what happened, why haven`t there been prosecutions thus far?

SCHNEIDERMAN: Well, I think, first of all, there have been some and
there are prosecutors who pursued cases, you mentioned a couple of my
colleagues who actually are part of our working group, Attorney General
Martha Coakley in Massachusetts, Attorney General Catherine Cortez Masto in
Nevada, which we just mentioned, also Beau Biden in Delaware and Lisa
Madigan from Illinois. So, they are folks who have been working on this.

What the president came to understand, I became attorney general about
a year ago, and started digging into this, and realized that New York and
Delaware, why my collaboration with Beau Biden was so important, we had the
unique place, because all of the mortgage-backed securities were actually
pools of mortgages deposited into New York trust or Delaware trust.

We started looking at what she is talking about, did they get the
paperwork done, things like that, and realized there was a lot of work to
do, but a lot of potential for proving liability. We started discussing
this with our federal counterparts a few months ago. I`ve been in
discussions with them and negotiations.

But the president took hold of this and said, you know what, we don`t
want to do this gradually. I`m going to throw resources behind this. I`m
going to mandate that the attorney general put together all the agencies
you need.

To get this done, Rachel, you need resources, you need jurisdiction
and you need will. And when I stood there today with Eric Holder and my
other colleagues in government, other prosecutors, I really felt that we
have that level of commitment.

MADDOW: There has been a sense in terms of pursuing accountability on
these issues that you and some of the other state attorney generals who
you`ve mentioned have sort of wanted to be more aggressive or maybe more
hard-nosed in terms of your approach toward the banks that you`re looking
and the mortgage holders that you`re looking at here -- more aggressive
than the federal government has.

The creation of this task force and your role in it, should we see
that divide as now something different? Is there a divide between the
state approach and federal approach now, or is it now a unified cause?

SCHNEIDERMAN: No, actually, what we realized as we go back and forth
over the last few months is that we all need to work together. There are
situations New York`s securities law is strongest security laws in some
ways than the federal laws. Some of our statutes of limitations, though,
are shorter. So, we can`t go as far back. Federal statute is longer.

We need everyone together. And the folks that we have in on this, the
Consumer Financial Protection Bureau, Rich Cordray, just -- a whole array
of new powers just came into existence with his appointment, which the
president just got done very recently. That`s a huge addition.

We have internal revenue service in, because they are a huge tax fraud
implications to some of the stuff that went on.

All of the people who are in this, all the agencies that have been
designated working together can achieve so much more than any one of us on
our own. I mean, we are working really hard here, Attorney General Biden
and I, and we were getting somewhere, but nothing compared to what we can
do with the level of cooperation the president has now mandated and I`m
telling you, the excitement in the room when we had the first working group
meeting of people realizing the potential for what we can do with the
hundreds of attorneys and investigators and accountants, we can throw in
this, was really palpable.

MADDOW: New York state attorney general, leader of the president`s
new financial crimes unit, for lack of the better term, Eric Schneiderman -
- it`s a real pleasure to talk to you about this stuff. But I`m also
hoping that as one of the people who I think is good about talking about
these things in a way regular people understand, I hope that this will
allow to you still do more media. I mean, both with me, but in general, I
think that you`re good at explaining this stuff, and the country has a real
interest in hearing from somebody plain-spoken like yourself. So, my
appeal to you.

SCHNEIDERMAN: I appreciate it. I`m not sure -- I`m certainly not
going to avoid your show like some folks do.

MADDOW: Very good. Fair enough. Good luck, sir. Thank you.
Appreciate it.


MADDOW: Did you hear that there is a special extra Nevada caucus
after the normal Nevada caucus this year? There is the Nevada caucuses and
then there`s an extra one. It`s weird, right? Weirder even than you would
imagine until you hear the details.

Stay tuned.


MADDOW: Best new thing in the world just ahead. And despite quite a
few e-mails today, I am not going to wear this again. It turns out it`s
way too clammy. That`s coming up.


MADDOW: Everybody from time to time has a little bit of the tin man
in them. If you`re finding yourself feeling tin man-ish, if you`re
starting to feel like you`re not sure if you have a heart, you need to get
the old waterworks going and proving the heart is still there thumping.
Then you go to YouTube and type in the search feature -- homecoming soldier

In fact, there is a whole video blog called the "Welcome Home" blog,
that just videos, pages and pages of videos of American soldiers coming
home from the wars. And surprising their families and their kids, and in
some cases their dogs welcoming them home.

If you`re feeling a little tin man-ish and need to exercise your tear
ducts, this is the way to do it.

The Afghanistan war, of course, continues -- 90,000 Americans
deployed. The target date for ending that war is not this year, not next
year but the end of the year after that.

But the Iraq war is over. It has been six weeks since the last U.S.
troops crossing the border into Kuwait for the last time. And while that
trip back from Iraq has led to lots of emotional homecomings, for families
at home and at military bases, in the civilian world, there has been as yet
no welcome home ceremony, no end of the Iraq war celebration, to say thank
you to the troops, to welcome them home and say we as a country were at war
-- a war that has ended.

It was not just America`s military at war. It was America. As yet,
there`s been no ticker tape, no marching band, no floats, no welcome home
parade anywhere in civilian life.

Tomorrow, St. Louis, Missouri, changes that. Tomorrow, St. Louis
becomes the first city to wave flags, float floats and bang drums to mark
the end of the war and to say welcome home. And it`s all because of two
friends who decided if nobody else would hold the nation`s first big
welcome home parade for the troops for the end of the Iraq war, well, they
would try to do it just as a couple of citizens.

So, they started a Facebook page, they collected donations, they met
with the mayor and pretty soon, voila, a parade. Floats are being built,
signs are painted, marching bands are practicing their routines. The
Anheuser-Busch Clydesdales are being harnessed.

The parade route is mapped out, hundreds of veterans are planning to
march. The parade starts at noon tomorrow, downtown St. Louis.

Joining us now the founder and executive director of Iraq and
Afghanistan Veterans of America, Mr. Paul Rieckhoff.

Paul, as always, good to see you.

with you. Happy Friday.

MADDOW: Thank you.

IAVA is going to be represented in St. Louis?

RIECKHOFF: Yes, absolutely. We are excited to be involved. We got
an Iraq vet named Angela Peacock (ph) who is leading the charge. She`s
organizing right now. She sent me a note on Facebook and said they
actually need more truck because we`ve got close to 100 vets that are going
to be going. Some of them are disabled. So, this has been a real
grassroots effort.

Angela`s stepping up and she`s going to lead the charge. It`s really
exciting. It`s a community effort. And people are coming from all over.
Your attention has helped as well.

It`s great to have folks get the recognition they deserve. And I hope
it`s the first of many.

MADDOW: It is amazing that it`s happening. I guess it could be
happening anywhere. The closest military base is three hours from St.
Louis. Why do you think it`s happening there?

RIECKHOFF: You know, I think there is a real sense of community in
St. Louis. You see that when the Cards do well. And some local leaders
who have been highly motivated stepped up. In the old Army adage, adapt,
improvise and over come.

So, they had the good idea, and social media helped tremendously. And
you got folks like Anheuser-Busch and the mayor and the others who are
getting on board. So --

MADDOW: The Mayflower Moving Corporation donated a chunk --

RIECKHOFF: Yes. There`s a great group. They`re called Mission
Continues as well. It had a national presence. It`s a patriotic city.
So, I hope it`s the first of many.

I have already gotten tweets and Facebook messages saying, hey, we
want to do it in San Francisco, we want to do this in New York.

MADDOW: Oh, cool.

RIECKHOFF: So, we hope that continues.

MADDOW: Well, Mayor Bloomberg in New York says it`s not going to
happen here. And his explanation of why is he said that he`s talked to
military leaders and what the Pentagon tells him is that they don`t want it
to happen because of Afghanistan, because it`s inappropriate to mark a
homecoming when so many people are still rotating out.

What`s your reaction to that?

RIECKHOFF: I think we hear that. I mean, we know there are folks
still fighting and dying in Afghanistan. But why can`t we have two


RIECKHOFF: Let`s have one when that`s over, too? And I think, you
know, Mayor Bloomberg is not exactly the guy who marched in lockstep with
everything that folks say. So, I wouldn`t be surprising if he changes his
mind on this or comes up with an alternative.

I think the people of New York have overwhelming responded to us and
said they want something. They want someway to recognize these people.
So, I hope we can work with mayor Bloomberg and Speaker Quinn and others
and come up with other ways to recognize them.

MADDOW: There have been city counselors who have advocating for it.
It`s funny in New York because you got this three-term mayor, he`s very,
very famous. His popularity swings but always stays high. Everybody is
sort of just waiting on Bloomberg to make the decision.

RIECKHOFF: We can push his hand here.


RIECKHOFF: And, you know, the Gulf War parade costs $5 million. He
can fund it himself. So, we can make it happen. We have done it for the
Gulf War, we`ve done it so many other times.

In New York is either going to lead the way or follow others. And I
hope they will be in front.

MADDOW: One last question for you. I know that you were Nancy
Pelosi`s guest at the State of the Union this week. Are you feeling like
Congress is moving forward on veterans` issues in a way that`s -- where
they ought to be right now? Or do you feel like there`s big challenges

RIECKHOFF: We`re still playing catch-up. And I think to say to you
it was a great message, the president really used the military community
and veterans as a model for the values that should embody America the way
we should all work together. I think that was a very powerful message.

But unemployment is still really high. We got 20 percent nationally
in our membership. So, in places like St. Louis, especially after we
finish those parades, we got to get them jobs. That`s going to be our
number one focus.

We`ll do an event at the Super Bowl in Minneapolis next week, and
we`ll be doing events around the country to try to get vets jobs. And
that`s got to be what Congress takes on. They should do it in a partisan

MADDOW: Don`t talk to me about the Super Bowl.

RIECKHOFF: Go Giants. How about them Giants?

MADDOW: My Super Bowl bet this year is with Paul Rieckhoff and I
don`t want to say anything else about it because I`m a little
superstitious. But nice blue tie.


MADDOW: Tiny little hands. Not even afraid.

RIECKHOFF: Cool under pressure. You`ll see.

MADDOW: Paul Rieckhoff, founder and executive director of Iraq and
Afghanistan Veterans of America, which is awesome, rabid Giants fan which
is weird. Good to see you, man.

RIECKHOFF: Great. Come over to our side.

MADDOW: Yes, right. It`s not even a side.

RIECKHOFF: Yes, it is.

MADDOW: Anyway, best new thing in the world, a special billionaire
edition, coming up next.


MADDOW: The best new thing in the world today is that we have proof
that art and life are now inseparable in the 2012 presidential race -- in
case Herman Cain didn`t prove it.

Here`s how this goes this time: Newton Leroy Gingrich, Republican
presidential candidate, has one major source of funding, Las Vegas casino
mogul and billionaire Sheldon Adelson. Sheldon Adelson is the guy who`s
pumped the billionaire`s equivalent of pocket change, $10 million so far,
into a pro-Newt Gingrich`s super PAC. Pre-Citizens United, impossible.
Now, anything goes.

The only reason Newt Gingrich is a conceivable choice for president in
America now is because one guy, one billionaire wants him to be. This is
our world now.

But now, this is the best new thing in the world part of it, now, the
billionaire bringing us the continued candidacy of Newt Gingrich is also
getting something else from this year`s presidential politics. He`s
getting his own private presidential caucus.

He lives in Nevada, right? And Nevada is like Iowa. It holds
caucuses instead of primaries. They happen Saturday, February 4th, day
before the Super Bowl. And the rules state that they have to be done by
3:00 in the afternoon on Saturday. Of course, Saturday is also the Sabbath
in the Jewish faith and for 7th Day Adventist.

Adelson is not only a deep-pocketed Republican. He`s also a strictly
observant Jew, and strictly observant Jews do not travel or conduct
business between sunset on Friday and sunset on Saturday in order to honor
the Sabbath.

So, this year the Republican Party of Clark County, Nevada, has
decided to schedule most of its caucuses at that time regular time, but
they decided to let one precinct start caucusing four hours after everybody
else has finished to accommodate 500 people including a guy named Sheldon
Adelson. That caucus precinct will meet at the Adelson Educational Campus,
which is a school named for Sheldon Adelson because he bought it.

This was first reported by our awesome friend John Ralston, a reporter
at "The Las Vegas Sun" who says this special Sheldon Adelson caucus, quote,
"seemed destined to cause controversy and further humiliation for the party
and the state."

Yes, yes, it does. Sheldon gets his own caucus held in a building
with his name on it after the other caucuses close. But also, yes, this is
handy thing because it eliminates the line between politics and art and
satire moot. And that is the best new thing in the world today.

That does it for us tonight. Now, you have to go to prison -- now.


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