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'The Rachel Maddow Show' for Tuesday, May 14th, 2013

Read the transcript to the Tuesday show

May 14, 2013

Guests: David Schultz; Mike Isafoff, Dan Rather

RACHEL MADDOW, MSNBC HOST: Thank you very much and thanks to you at home
for joining us this hour. New York City is the largest city in the United
States. We all think of it as a sprawling metropolis. And, because it is
so big, even while you are in New York City, it is very easy to forget that
where you actually are is on an island in the North Atlantic.

Manhattan is surrounded by water. Staten Island is, as the name implies,
surrounded by water. All the New York City boroughs have coastlines. And,
you know what? It is possible to do some very good fishing, some North
Atlantic fishing in say Brooklyn, New York. I know this for a fact because
I caught this fish in Brooklyn on Friday morning before I came to work.

If I seemed unusually happy on Friday night`s show is because, look at the
size of that striper that I caught in Brooklyn. You can fish in Brooklyn.
There is good fishing in Brooklyn. And, there are a lot of people, who do
it for fun and are people who do it commercially.

And, on June 14, 1971, at a fish company in Brooklyn, a very strange thing
happened. The previous day, "The New York Times" had started publishing
the "Pentagon Papers" along four multivolume classified narrative history
of the disastrous U.S. war in Vietnam.

This thing was never supposed to be made public, but it was stolen from the
government by a whistleblower, who thought the public should have access to
the same information about the war that the government had. It was
smuggled to "The New York Times" and The Times made a very difficult
decision to publish the "Pentagon Papers" despite the fact that it was
classified material.

And, when The Times published the first installment on June 13, 1971, the
paper must have just been waiting for the other shoe to drop. I mean they
knew exactly what they were doing. They knew how big a storm this was
going to cause. They were waiting. They must have just been waiting for
what would be the inevitable super angry response from the government,
right? The demand that they cease publication and all the rest.

But, they published this thing on June 13th, and there was no response from
the government. And, that is because it turns out that on June 14th, the
day after they started publishing the "Pentagon Papers," there had been an
angry, threatening telegram written by the attorney general to "The New
York Times" that they cease publication of these documents, but the FBI
accidentally sent the telegram to a fish company in Brooklyn instead of to
"The New York Times."

And, so what "The New York Times" heard the day they published the
"Pentagon Papers" and the day after was nothing. And, this fish company in
Brooklyn must have been very, very confused by the angry telegram they got
from the attorney general. Eventually, the attorney general`s office and
the FBI got it together and they sent the telegram onto the actual "The New
York Times" demanding the return of the "Pentagon Papers" and demanding no
further publication.

The Times said, "No." The Times kept on publishing. They published on the
13th, and they published on the 14th, and they published on the 15th, and
then the government finally got a temporary restraining order blocking them
from publishing anything further.

Pentagon Papers was the first time that the government had ever used the
court to block the press from publishing something that the press wanted to
publish based on National Security Grounds. And, that temporary
restraining order that they got a couple of days in to the publication of
the "Pentagon Papers" -- that temporary restraining order ended up becoming
a major federal first amendment case.

The newspapers involved in the case within a week had lost the district
court level. They appealed to the circuit court level. And, by the end of
that month, by June 30, 1971, the case had already gone all the way to the
Supreme Court. They started publishing it on the 13th. By the 30th, they
are already in the Supreme Court ruling.

The Supreme Court ruling that the government could not block newspapers
from publishing this stuff. And, the newspapers went ahead and hopefully
the fish company in Brooklyn framed the telegram. Some government lost
that effort to block the press from publishing something that the press
wanted to publish, but the government said, "It would be dangerous to

The government lost at the Supreme Court. But, that does not mean that
they got over it. You know how in Watergate, the Watergate burglars were
called "The Plumbers?" They were not called the plumbers because they like
dressed up like plumbers and that is the way they snuck into things.

They were called "The Plumbers" because the reason they were breaking into
all the various places they broke into was that they were plugging leaks.
They were plumbers dealing with leaks. But, these were leaks of
information. They were trying to find out who in government was providing
classified or secret information to the news media, including the "Pentagon

That was the whole origin of "The Plumbers" and the Watergate scandals,
find the leaks, right? And, thereby stop the press from publishing
something that the government does not want published.

This is a foundational conflict in our country. It has been really
important from the beginning of our constitutional republic. There is a
reason that the freedom of the press is the first amendment to the
constitution. It is because the founders knew how important it is to have
the press telling as much of the truth as possible.

And, they also knew the temptations, the constant temptations for people in
power to try to stop the press from doing that, even though in the long-run
we really need the press to be doing that. So, the founder said right off
the bat, "Amendment one, we are taking sides of this fight. We know that
this is a fight that is going to persist throughout the duration of this
nation. We right here in the first amendment to the constitution are
taking sides and we are taking the side of the press."

The press housed the constitution`s protection clearly in these inevitable
fights, and that is a fundamental part of what our country is. I take it
as a sign of their wisdom in being so clear on the matter in the
constitution that these fights are not actually seen as settled, right?

They keep happening over and over again in every century, in every
presidency just about. It turns out we need to constantly re-reference and
re-read and demand the respect for the first amendment every year all the
time, because this is an important fight. The important fights are the
ones that don`t go away despite as a constant feature of a free press and a
strong government in their inevitable collision force.

At the end of 2005, during the presidency of George W. Bush, James Risen
was one of "The New York Times" reporters, who broke the news that the
government was wire tapping people without getting warrants to do that.
They just decided that -- they even know that they always needed warrants
before. They didn`t need them anymore.

The response to the administration to the publication of that story was not
just to deny the story or to express unhappiness with the fact that this
government policy was known and they wanted to keep it secret. The
response from the administration was instead to demand that that reporter
be thrown in prison. That he be compelled by criminal law to reveal his
sources, to reveal who had given him the secret information, that was so
important to keep secret, but he made it public.

They subpoenaed him to demand that he give up his sources. And, Jim Risen
made clear in his filing with the court, when he was trying to say, no to
that subpoena, to try to resist having to testify. He made it clear that
the administration was really using everything it had to go after him,
quote, "The first subpoena issued to me was the culmination of a prolonged
campaign against me by the Bush administration and it`s supporters.

President Bush called the disclosures about the likely illegal wire tapping
program, `A shameful act in the administration.` And, its supporters
thereafter publicly speculated about potential prosecutions of me for
espionage." Shortly after that, an organized campaign of hate mail from
right-wing groups with close ties where the White House was launched
inundating me with personal threats.

Meanwhile, protesters supporting the Bush administration picketed my office
calling for me to be prosecuted. Right-wing pundits and bloggers
supporting the bush administration took to T.V. and the internet to call
for the White House and the justice department to prosecute me for

Failing that, they called for the justice department to subpoena me in a
leak investigation, which right-wing pundit said would have the same effect
as prosecution since they can force me to go jail if I refuse to testify
about my confidential sources."

Going after reporters, using the full power of the federal government to
stop reporters from publishing things, the government did not want
published, or to punish reporters for doing that. That became kind of a --
on the right in the mid 2000s.

I remember Congressman Pete Hoekstra, that year -- later that year,
campaigning for his reelection in Michigan telling his local paper that
James Risen and his co-author from "The New York Times" who reported that
wire tapping story, quote, "They will be sitting in jail by the end of the
year, unless they reveal their sources."

Around the time that the right had the torches and pitch forks out, wanting
to put all the reporters in jail, "ABC News" reported that the government
was not just demanding that reporters reveal their confidential sources and
threatening to put them in jail if they did not. They were also secretly
going through journalist`s phone records to try to figure out journalist`s
sources that way.

According to a senior federal law enforcement official, journalist`s phone
calls, the incoming and outgoing numbers were being monitored by the
government as part of a widespread leak investigation. The title of that
article was "Federal Source to ABC News, we know who you`re calling."

It`s chilling, right? I mean you`re a reporter. You are trying to find
out what the government is doing. But, if you find out too much about what
the government is doing, "Hey, you might end up in jail." You certainly
can`t tell your sources that you`ll keep their identity safe. You can`t
tell your sources that they can trust you to keep their identities out of

If you have to tell them is, "Yes, they are probably going to put me in
prison until I tell them. This is chilling. This is chilling on purpose
and those details reported by "ABC News" in 2006 to reporters to try to
fair it out, who was leaking to these damn reporters, right? It appears to
be exactly what the Obama Administration is doing now to fair it out, who
is leaking to these damn reporters.

It is exactly the same thing. In an investigation that appears to be
related to AP reporting on the CIA busting up An Al-Qaeda bomb plot a few
years ago. The justice department has notified the AP that at least 20 of
their phone lines including the personal and celphone numbers of a number
of their reporters were swept up in a drag nut by the justice department.

Two months worth of these phone records were obtained by the FBI. And, it
is over and done with. They only told the AP after it happened. When the
AP published that story a year ago about the bomb plot being busted up by
the CIA. The response on the right was kind of a mini version of the
torches and pitch forks that came out against those "New York Times"
reporters back in the mid 2000s.

But, in this case, because it`s a democratic president, the outrage on the
right was directed against not just the reporters -- No. No. It was
against the government. Republicans alleging that the government was
leaking to these reporters on purpose for the Obama administration`s own
political gain.

They were alleging that the administration doesn`t care enough about
classified information being leaked. It helps them when it leaks. If they
really cared about it, they would freaking investigate it, right? They
would find out who is leaking information to these reporters. They would
chase this thing down.


be saying is that this is very damaging to the country. And, we are going
to do everything we can to get to the bottom of it, whether it involves my
White House or where ever in the intelligence community.



MITCH MCCONNELL, (R) KENTUCKY SENATOR: Well, we certainly need to have an
investigation of what has happened.



PAT TOOMEY, (R) PENNSYLVANIA SENATOR: The question though is do we really
have an independent and aggressive investigation, because these leaks are
very, very disturbing.


MADDOW: Republicans last June demanding a serious investigation into these
dastardly leaks to these AP reporters. Well, they got their investigation
and as part of that investigation, the attorney general, himself, was
investigated as to whether maybe he was the leak to those AP reporters, or
perhaps did he know who was the leak.

And, because the attorney general, himself, was interviewed as part of the
investigation, he could not himself head up the investigation. So, he
refused himself in order to avoid a perceived conflict of interest. But,
that month, June of last year, the IG appointed two U.S. attorneys to
investigate the leaks. He appointed a deputy attorney general to oversee
all of it.

We now know as part of this investigation that we got this unprecedented
tracking of 20 different phone lines from the associated press. We also
know that the justice department just decided to do that on their own. It
never had to get permission from a court.

There had been a media shield law that would have said that if you want to
wiretap reporters, if you want to access reporters phone records, you at
least have to get a court to sign off on it. Prosecutors can`t just do
that themselves on their own say so.

But, that media shield law was defeated by a republican filibuster in the
senate in 2007. So, that is why the justice department can`t just do this
on their own say so. That is how we got to where we stand today.

We got a few new details today. We got one additional name today in terms
of AP reporters and editors, who were individually targeted by the subpoena
of their phone records. We now know that it was outgoing phone calls from
these AP reporters in these reporters` phones that were subpoenaed by the
justice department, not necessarily the incoming numbers or the duration of
those calls, which have not been cleared yesterday.

The deputy attorney general, who was in charge for this investigation also
said today, that supposedly, the content of these reporter`s calls was not
monitored. It was just the fact that the call went out and what number it
went to.

Then we got the White House denying any involvement or even any knowledge
that this was happening. We got the attorney general saying that none of
this was his call. He was out of the loop. We got the AP today.

If anything more livid -- more livid today than they were yesterday that
this is happening as they get more information from the government about
what their news bureaus and their reporters were subjected to, that they
never found out about until after the fact.

And, we`ve got all of this happening in the context of this great American
fight. The inevitable prime and pressure of an aggressive free press
reporting on what the government does whether or not the government wants
it reported. The repeated familiar overreaching efforts of the government
to stop the press from doing that.

And, most importantly, the fact that the writers of our constitution knew
that government would always be tempted to act this way. And, that is why
they made it very, very clear that our constitution takes sides.

This fight is inevitable, but in America, the winner of this fight is also
inevitable. So, how is the AP going to win this fight? They are going to
win. Joining us now is David Schultz. He is a media attorney for more
than 30 years. He now represents the AP. Mr. Schultz, thank you for being
with us tonight.


MADDOW: I`m sure that long exposition of the facts and my take on them
does not exactly comport with yours, but in term of the AP`s role in all of
this, I should just ask you if your factual understanding what happened
thus far, was it all conflicted?

SCHULTZ: I contrast that. I think you got it just right.

MADDOW: OK. It is a constant balancing act in the United States. Freedom
of the press versus National Security or anything the government doesn`t
want disclosed. Is tit AP`s position that the justice department is within
its rights to be investigating these leaks? It is just that they are doing
it in a way that is too rushed.

SCHULTZ: Sure. There is no question that the justice department has the
right to investigate leaks. But, I think the key, which are handed on when
you are setting this up, there is an inherent conflict between the
government`s ability to keep secrets and the ability of people to oversee
their government.

That you have to have access to government information. You need
confidential sources to give you that information or the only thing is you
are going to know about the government is what they want to tell you. So,
we have always had that throughout our history.

The real problem here is that in the mess after Watergate to some of the
circumstances you are just walking through, regulations were put in place
to try to mediate that line. To set up rules that would help us not
overreach one way or the other. To give the press a zone of protection
that they could operate in knowing that they had some freedom from
government interference.

And, those were in the form of regulations that were imposed, adopted by
the Department of Justice and they are forming provisions. One was that
the government premaster was required under the regulation not to go after
reporters information, unless it was critical to investigation, not just
relevant or phishing. That was one.

Number two, they could only go after it, if there were no alternative
sources. They had to exhaust all of their alternative sources. And, then,
number three, if they were going to go after it, they had to make it as
narrow as possible, so that they weren`t interfering unnecessarily with the
activities of the press.

And, the fourth one, which is also a key is that they are supposed to
negotiate with the press ahead of time. To go to the press and say we need
this information from you. Here is why we need it and have a negotiation
over how broad it is. So, that they don`t interfere with the press.

What happens here is that those regulations were just ignored. You know,
the justice department, they said we follow the regulation to the letter.
But, this is really an unprecedented action in terms of its scope. You
mentioned 20 lines.

They weren`t just individual reporters. They were bureau lines. They were
the Hartford Bureau, the New York Bureau, the Washington Bureau, the Bureau
and house representatives. In those bureaus, 100 more AP reporters work
and for a period of two months, the government got all the information
about who were they calling relating to all their stories --

MADDOW: So, when we say phone lines, somebody who`s working -- like for
example in my office, we got a number of people who work in my office,
somebody calls them in line and you can get to any one of us. So, you are
saying that hundreds of reporters were using these lines that had their
outgoing numbers recorded?

SCHULTZ: Hundreds -- My understanding is that there were hundred or more,
around hundred in the bureaus that had their lines taken. So, the
information seize --

MADDOW: So, anybody using their desktop.

SCHULTZ: Could have been -- yes, not all the lines. There are certain
lines, but some of them were general numbers. So, it wasn`t just targeted
to specific individuals. So, that`s number one. The other thing that you
highlighted that is really problematic here was the invading this
requirement of prior notice.

And, why is that important? Because if prior notice had been given, it`s
not just negotiations, but it force the press an opportunity to go to a
judge and say, "We think that they are going too far and they are
interfering with our constitutional rights and you have an independent
arbiter who can evaluate that."

The government just chose not to do this. Now, they will say they are
entitled to under the regs, but what the reg says is that they should only
do it if it would undermine the integrity of the investigation. And, it`s
really hard pressed.

We would like an explanation from the department of justice. How notifying
the AP that they need phone records with respect to a publicly disclosed
investigation. This is not a secret investigation over facts that happened
a year ago would undermine it.

MADDOW: They have asserted that they are within the bounds of all of these
justice department regulations in terms of it being a last resort. They
said that they did more than 500 interviews. They reviewed tens of
thousands of pages of documents before they decided that no, they really,
really needed to look at these AP reporters phone records. Obviously, you
don`t find that persuasive enough. Do you want more of an explanation or
do you want some further kind of recourse beyond explanation?

SCHULTZ: Well, there are two things. It is not necessarily that we don`t
take them at their word that they did a lot, but a judge should be
reviewing that. They should not be deciding for themselves when it is time
to interfere with the new gathering activities --

MADDOW: Without a national media shield law, though that`s not the --

SCHULTZ: Under the regulations if they had been given notice to AP, AP
could have gotten a judge to review it. That is what happened in other
cases. There was a case involving a -- a "New York Times" reporter and
Judy Miller in 2001, where there was an allegation that they had tipped off
an Islamist group about a raid and they wanted to know how that happened.

They went to the "New York Times" and said we need your phone records.
They went to court and they got a court to review them. That whole process
was short circuited here. And, that is what so troubling is the
willingness the administration to just throw that all over board in SEAL to
go after this week.

MADDOW: When do you think the recourse will be here?

SCHULTZ: First, we want information. We would like to know from the
justice department what else they got from the AP reporters. You know,
under the regs, they have to disclose if they subpoena telephone records.
There is nothing in these regs. These regs were passed after Watergate to
address the situation that existed. Nothing in the regulations requires
the department of justice to disclose if they sought e-mail from their
reporters. If they did other sorts of investigating on these reporters.

So, there are a number of things we would like to know. And, once we have
that then we can assess what our resource might be of course and we would
also hope of a dialogue with the department of justice about the drastic
needs of update and improve these regulations and to talk with them about
the seriousness of the impact on the reporters.

MADDOW: In the long run, and I don`t know how long the long run is, but in
the long run in this country, your side wins these fights. And, so I don`t
know how long it will take, but that is the way it ends.

SCHULTZ: I hope you`re right.

MADDOW: David Schultz, an attorney representing the associated press in
this case. Thank you for helping us sift through this. I appreciate it.
We`ll be right back.


MADDOW: Here`s what things are like now in the nation`s capitol. Here is
how you know that we are in the middle of probably a crazy news cycle.
This is what it looked like at 1:30 p.m. eastern time here on MSNBC. It
seems like it`s too much news to cover. Not enough space on the T.V.

Check out the banner at the bottom of the screen. Left, dog briefing.
Right, White House briefing. This is news overload. On the left, Attorney
General Eric Holder just starting his press conference to answer questions
about the justice department unprecedented seizure of AP phone records.
While he was doing that, White House Press Secretary Jay Carney is trying
to put out another fire entirely.


JAY CARNEY, WHITE HOUSE PRESS SECRETARY: If we`re seeing in some of these
reports about specific targeting and actions taken by personnel within the
IRS, it turns out to be true, then people should be held accountable.


MADDOW: Jay Carney there, referencing the other big D.C. scandal of the
week besides the AP thing. If the scandal involving IRS. And, Friday, we
first started getting reports of alleged wrong doing of the IRS,
specifically wrong doing when it came to how agents at the IRS were
evaluating different groups that were applying for tax exempt status.

The initial apology from the IRS on Friday indicating that the agency had
singled out conservative groups. Groups of the word Tea Party or the word
Patriots on their name, flagging those conservative groups for special
scrutiny on their on their applications. Well, since then, there has been
some indication that the IRS official, who first apologized on Friday also
had tried to fix this problem when she first learned about it last year.

Also, the White House has denied any knowledge of what was going in the IRS
-- at the IRS on this issue. The acting commissioner of the IRS appears to
have been briefed on the problem before fielding questions about it from
congress. But when members of congress asked him about it, he did not
mentioned that he knew there was a problem even though the IRS as he had
been brief on it.

And, now, tonight, we finally get the inspector general`s report that
purports to explain what happened. We are still combing through all the
details, but one of the things this reports seems to address is the
question of whose big idea this was any way. According to the report
released tonight, quote, "Official stated that the criteria were not
influenced by any organization outside the IRS.

Within the last hour, President Obama has released a statement calling the
report`s findings quote, "Intolerable and inexcusable." He said he has
directed his treasury secretary to Jack Lou to hold those who are
responsible for these failures accountable to make sure that each of the
inspector general`s recommendations are implemented quickly, so that such
conduct never happens again.

President statements says the IRS must apply the law in a fair way and
impartial way, that these employees must act with upmost integrity. This
report shows that some of its employees failed that test. Joining us now
is Michael Isakoff, NBC news investigative correspondent. He has been
going though the report since it was just released tonight. Mike, thanks
very much for being here.

you again, Rachel.

MADDOW: One of the things I wanted to ask you about is the report lays out
this IRS criteria for who to target, how do target scrutiny for these
applications using a BOLO, which is an acronym for be on the lookout. Can
you explain that?

ISAKOFF: Right. That was one of the most delicious parts of the report in
reading it. I mean we have all heard of BOLOs when the FBI issues them for
terrorists or bank robbers. I was not aware until this -- all these
disclosures that the IRS issues its own BOLOs in this case for people whose
names had -- organizations with names with the Tea Party in it.

But, it`s pretty chilling to learn that the IRS would be issuing BOLOs,
which really ultimately is a form of profiling in this case. They are
saying that anybody who has that name in it, we got to look at it and give
some special scrutiny. So, that was a bit troubling even if it was a
little amusing.

But, beyond that -- I mean the report, you cut through all the bureaucratic
language and it`s pretty blistering. The people who did this in
Cincinnati, the determinations unit, didn`t even understand what the rules
were for tax exempt organizations. The report says that on multiple
passages and these are the people making these decisions.

The inappropriate criteria using the Tea Party, Tea Party-like names in it,
lasts for 18 months. The high level officials become aware of this and try
to change the criteria. They are being asked multiple questions by members
of congress and they don`t reveal anything about the problems that are --
that were going on.

And, I think that is where the first serious problem`s going to be. You
are going to see congressional committees saying, "Hey, we wrote you
multiple letters about this. We asked you questions about it." You wrote
us back and there`s like three or four letter from the acting commissioner
talking about the lengthy and pain staking process the IRS uses for
evaluating these sort of applications and there`s not a whiff of a mention
we`ve got a serious problem on our hands.

MADDOW: Even though those officials answering those questions, we now know
had been briefed on this problem happening at the lower level in the
agency, right?

ISAKOFF: Exactly. And, you highlighted the part that the White House is
certainly going to see that, which is that they did this in Cincinnati on
their own. But, the idea that government bureaucrats operate in a vacuum
without knowledge of where the political winds are blowing is a myth. I
mean we have seen in -- You know, you and I have thought on multiple
occasions about the run off to the Iraq where war where the CIA was shaping
intelligence to fit what the White House wanted to hear.

Now, in this case, I`m not equating the two, but there is a parallel.
Everybody who after citizens united, a lot of people were concerned about
the abuse of 501c4s. And, the use of those sort of organizations to pump
big money into electoral process, the president announced that leading
democrats in congress that announced it.

And, then a few months later after the 2010 election, these bureaucrats of
the IRS in Cincinnati decide, they are going to target the Tea Party. Now,
they targeted the wrong people. As we know, there were much bigger abusers
of the 501c4 tax exempt abuse than the Tea Party, but it`s hard to divorce
that from the larger political winds that were blowing at the time.

MADDOW: Absolutely. And, had they -- had they themselves made a decision
that was overtly nonpartisan and non-ideological and neutral on the
ideological part of it, nobody would be peeping about this, really. But,
the fact that they put this ideological spin on it themselves -- yes, this
isn`t over. Michael Isakoff, NBC News Investigator Correspondent. Mike,
thank you very much for helping us with this.

ISAKOFF: Thank you, Rachel.

MADDOW: I appreciate it. One of the things to watch for tomorrow on this
-- Obviously, the big bottom line here is that none of these groups that
got targeted by the IRS actually got their applications denied. But, one
of the things that is in the IG report is that although they didn`t get
denied, they may have been delayed, maybe unconscionably delayed by going
though this process.

Was this a way to keep people out of the political process in a way that
they would have otherwise been able to be, how they gone through the
process quicker. Watch for that tomorrow. We`ll be right back.


MADDOW: The Obama Administration is having a terrifically terrible week.
But, in the big picture, how does this rank among other presidents
terrifically terrible weeks? Dan Rather is here tonight for the interview.
That is next.


MADDOW: For as long as there has been a federal organization that collects
taxes, there have been people claiming that organization is going after
them for political reasons or personal reasons. Often, those people have
been right, under JFK, it was the ideological organization project.
Eighteen right wing organizations selected for special audits, although
there was no evidence of tax violation.

Under Richard Nixon, it was the special services staff set up to target the
president`s enemies and groups on the left. The FBI in the 1960s using the
IRS as a weapon to harass and try to discredit Martin Luther King JR and
the southern Christian leadership conference.

In the late 1960s, the CONINTELPRO program to disrupt and neutralize groups
on the left, using the IRS as a weapon. Using the IRS as a weapon, the FBI
directing the IRS to investigate individual activists on tax grounds. "

Time" magazine today recounting how the FBI picked out one college
professor in particular, who they told the IRS to audit 1968, explaining
that the audit should be timed specifically to be a, quote, "distraction"
during the critical period when he is engaged in meetings and plans for
disruption of the democratic national convention that year in Chicago.

As we talked about on last night`s show, the IRS under George W. Bush, went
after at least one major liberal church threatening its tax status over
excessive political activity while apparently ignoring the same or greater
levels of political activity from conservative churches.

Famously, in 2004, the NAACP saw its tax status threatened by the IRS
explicitly on the basis of them criticizing the presidency of George W.
Bush. Tonight, President Obama says he wants to treasury secretary to hold
accountable those responsible for subjecting conservative groups to extra
scrutiny in their applications to the IRS for tax exempt status.

Is it appropriate to contextualize this current IRS. Amid the history, the
long sorted dirty history of using that agency and others as a tool of
clear political welfare or is this something else.

Joining us now for the interview is Dan Rather. He is anchor and managing
editor of Dan Rather Reports on AXS TV. His latest program is called
"Operation Streamline" and it airs tonight at 11:00 p.m. Eastern. Mr.
Rather, thank you for being here.

pleasure to be here.

MADDOW: What is your big picture perspective on how big a scandal this
current IRS scandal is and how it relates to the other very overt uses of
the IRS for political aim that we have seen from other presidencies?

RATHER: Well, first of all, I want to be surprise as you laid out
administrations have been doing this for many, many years, both republican
and democratic administrations. But, not all cases are the same. In the
case of the Richard Nixon administration, it was the president himself. It
was proven. There is no doubt about it. It was the president, himself,
who said, "Go after these people on their taxes."

MADDOW: He is on tape saying it?

RATHER: He is on tape saying it. Now, that is a far cry from where we are
today. There is no proof that anybody at the White House, never mind the
president himself, has been involved in this in the slightest. There is a
great deal of difference.

However, there needs to be and I have now think that there will be, a long
investigation into this case. And, there are those who believe -- you
know, somebody at the White House must have winked at somebody at the IRS.
If, if, it reaches the level of even a mid level of the Obama
Administration, it is serious trouble for him.

It`s a benefit to the republicans because they can keep him on the
defensive. It also helps republican office holders bond again with the Tea
Party without difficulty doing that. But, I think in the overall picture,
what we have right now is an embarrassment for President Obama and a
warning to him, if you will.

You know what? You`ve got to be really careful up and down the line
because even seemingly small things such as this and make no mistake about
it. It was no small thing in of itself to target one side of the political
spectrum. Lets say we`re going to make things difficult for him
particularly in this election year.

Serious business, but is it a case of people down the line and only those
people involved? Now, obviously, many republicans and some who are not
republicans think, it had to be other people involved. What President
Obama needs, he doesn`t need me to tell you, what he needs to do, but he
needs to do -- he needs an immediate, really fast, but completely thorough
investigation into this. And, however, bad the news is, put it out.

MADDOW: What is the character of an investigation like that? Does he name
somebody from outside the administration to come in at some sort of special
investigator capacity? Does he count on as his remarks indicated?

Tonight, directing the secretary Lew of the Treasury Department where the
IRS is located to make sure to hold those responsible for these failures?
Does he need to do -- does he need to direct that something else happened
that might not otherwise happen in the normal course?

RATHER: From my personal opinion, yes. There would be pressure for him to
do that.


RATHER: It is not a special prosecutor, some special investigator. But,
there will be a pressure to have a special prosecutor for obvious reasons.
But, you are making some of the right moves immediately now. But, he needs
to stay on top of this.

But, you know, one smile at this degree, the republicans are very good at
this and that is not a criticism. They are the out party. If you remember
when President Bill Clinton was reelected, they scrambled all over the
Clinton Administration.

And, I won`t say they ruined Bill Clinton`s second term. The president
himself and his actions -- but, they expose it. They kept the pressure on.
They are playing by that same playbook now. Benghazi is by that play book.
This is by the play book. And, again, as long as there`s something to it,
and there is a lot to this IRS thing that even if it turns out to be a few
low level people, who didn`t do what they were supposed to do and he is
limited to that, it is very serious.

As you pointed out and then pointing out to the program. You have to have
integrity with the tax operation. If you don`t have that integrity, then
people lose trust in the government as a whole, not just to the

MADDOW: You have to act decisively to put a whole stop at the end of it.
On the AP story, we were discussing earlier with the council from the
associated press. I know that you have some experience of being gone after
by an administration because of your reporting. Didn`t you get sort of
Nixon burglarized during the Nixon presidency?

RATHER: Yes, I did. Long story, but it turned out -- I didn`t know at the
time our home was burglarized by people who turned out to be a part of the
plumbers operation and notorious plumbers operation.

I didn`t know it at the time. It was a long time figuring out who did it.
There are those to this day said, "No, it wasn`t really that." But, it was
and our home was broken into it. But, this became common during the Nixon
administration. It was home who broken into doctor`s offices, were broken
into it to get information, tapping telephone lines, tapping people`s
telephone lines, very common.

And, when people say, "Well, Watergate wasn`t that big a deal." Keep in
mind, Watergate is shorthand for a widespread criminal conspiracy lead by
the president of the United States himself, which more than 40 people
eventually served hard time. So, people who don`t like the hard facts of
history about the Nixon administration, every time some scandal happens,
they say, "Well, this is Watergate." Quite honestly, they don`t know what
they`re talking about.

MADDOW: Dan Rather having you here is the best perspective that I get.
Ever, whenever you are here.

RATHER: Wow. Thanks.

MADDOW: Thanks so much for being here.

RATHER: Thanks for that.

MADDOW: I appreciate it.

RATHER: Thank you.

MADDOW: I should tell you that Dan Rather`s latest program Dan Rather
Reports on AXS TV again is called "Operation Streamline" and it airs
tonight at 11:00 p.m. on AXS. All right, if you are counting at home, a
very important number is now up to 12. Big news for Minnesota. Straight


MADDOW: On December 9, 1974, Minnesota State Senator Allan Spear came out
on the front page of the Minneapolis Star Tribune. The article read, Allan
Spear is a 37-year-old freshman member of the Minnesota senate, a DFLOR,
which is the Democratic Farm Labor Party in Minnesota.

Allan Spear is an associated professor of history at the University of
Minnesota. A respected specialist in Afro-American history. Allan Spear
has a doctorate degree from Yale, and has written a book on the making of
the Chicago Black Ghetto.

Allan Spear has long been active in DFL, civil rights and peace causes, and
has ranked as the most liberal state senator in Americans for democratic
action survey. He is also a homosexual and as of today does not care who
knows it.

Allan Spear also is a homosexual. And, as of today, he does not care who
knows it. Allan Spear made history that day, as one of the first ever
openly gay elected officials in this country, that was 1974 that front page

In the 28 years, he ended up serving in the state senate, partially through
his leadership. Minnesota had a landmark achievements in gay rights
including a sweeping anti-discrimination statute passed in 1993. Although,
they did have some landmark achievements as a state, Minnesota never got
around to recognizing marriage equality.

Then in the mid term elections in 2010, it was the Republican Party that
took control of both chambers of the Minnesota legislature for the first
time in 40 years. And with their new found power, Minnesota republicans
put on the ballot, a state constitutional amendment to doubly, triply ban
gay marriage, once and forever in the state even though gay marriage wasn`t
legal there anyway.

But, republicans wanted a constitutional ban on same-sex marriage, and they
put it on the ballot, and then when it went for statewide vote last year in
November, it lost. That had never happened before, ever.

Thirty-one states had voted on amendments just like that one, and all 31
had voted against marriage equality, until that all changed this past
November. Minnesotans made history in November when they voted no and they
decided not to change their state constitution to ban equal marriage

And, at the same time, on the same Election Day, on the same ballot,
Minnesota voted to return the control of both houses of their legislature
to the Democratic Party, to the DFL. And, the democrats in Minnesota
decided that, that vote where the state said, "No to banning equal rights,
that vote deserved another vote."

And, so beyond just not banning same-sex marriage, the state, they decided
should legalize same-sex marriage. And, last Thursday, the Minnesota house
took up the question. It passed by a surprisingly comfortable margin, even
a handful of republicans voted yes.

That sent it to the state senate, where yesterday with a packed rotunda for
what everybody anticipated to be a historic day. The Minnesota state
senate debated and then voted. And, the Minnesotans who supported equal
marriage rights ended up doing much better than anybody expected.


RON LATZ, (D) MINNESOTA SENATOR: Members, in my humble judgment, this is
indeed the civil rights issue of our generation. We are on cusp of making
historic decision about what civil rights we will live with, what kind of
society we will live in.

BRANDEN PETERSEN, (R) MINNESOTA SENATOR: I vote yes on the first and 14th
amendment. I stand here quite honestly more uncertain of my future in this
place than I have ever been. And, when I walk out of the chamber today --
but when I walk out of the chamber today, I am absolutely certain that I`m
standing on the side of individual liberty.

SCOTT DIBBLE, (D) MINNESOTA SENATOR: Members, please. Please vote yes.
Vote yes for freedom. Vote yes for family, for commitment, for
responsibility, for dignity. Vote yes for love.


MADDOW: That was democratic state senator Scott Dibble, who is an openly
gay member of legislature, and who is the man who now holds the same senate
seat that was once held by Allan Spear. Senator Dibble offer the marriage
equality legislature and throughout the whole debate, he wore Allan Spears
campaign pin in tribute.

It took four hours of debate and then the same sex marriage bill passed the
state senate yesterday by a vote of 37-30. Lots of votes to spare, even
some republicans. So, that makes Minnesota the 12th state in the country
to recognize marriage equality and the third state to do so just this

Minnesota`s democratic Governor Mark Dayton signed that bill into law this
afternoon just a few hours ago on the steps of the state capital. A big
historic day in Minnesota that was a long time in coming for whole group of
Minnesotans who could not be married before wedding bells, they can start
to ring on the state on August 1st. That is the first day of the new law
goes into in effect.


MADDOW: I have some breaking news tonight. One week ago you will remember
that the lieutenant kernel who the U.S. Air Force had put in charge of the
air force`s sexual assault prevention office was himself arrested and
accused of sexual battery.

Well, now a week later a second U.S. service member, who is assigned to
military sexual assault prevention is being investigated for sexual
misconduct. At this time, it is the army of the U.S. Army Sergeant First
Class from Fort Hood, Texas, who is assigned as an equal opportunity
adviser and sexual harassment assault response prevention coordinator.

He is under investigation for pandering, abusive sexual contact, assault
and maltreatment of subordinates. A defense official telling NBC News
tonight that this sergeant first class is being investigated for forcing at
least one subordinate soldier into prostitution and for sexual assaulting
two other soldiers.

That soldier has not yet been charged. The army has not releasing his
identity, but that special agents from the U.S. army criminal investigation
command are conducting this investigation. Again, this is just breaking
tonight, but yet U.S. soldier in this case in a leadership position in
sexual assault prevention himself under investigation tonight for sexual
assault. Unbelievable. Do believe this week?

Now, time for "THE LAST WORD" with Lawrence O`Donnell. Have a great night.


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