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'The Rachel Maddow Show' for Monday, July 8th, 2013

Read the transcript to the Monday show

July 8, 2013
Guests: Elizabeth Goitein, Cecile Richards, Eliot Spitzer

EZRA KLEIN, GUEST HOST: I`m looking forward to the conducting it and
thank you very much.

And thank you to you at home for sticking around the next hour.

Just because Rachel has the night off and well-deserved, it does not
mean the news took the night off with her. There is the huge announcement
Texas Governor Rick Perry made today about his political future.

And then also in Texas, the popular uprising to the abortion bill that
Governor Perry is making sure, he`s making certain the Texas Senate is
going to get a chance to actually pass. That battle is heating up again
tonight after the long holiday weekend.

And as Chris mentioned, for the interview tonight, you might have
heard of former New York governor Eliot Spitzer maybe running for office
again. But he`s not running for governor or senator or even mayor. He`s
running for local comptroller. We will ask him why.

But we begin tonight, we begin tonight with actually something
shocking. This is a huge story. And I mean it when I say a story every
American needs to know about and be thinking about.

It is a story about a secret court, one that is operating inside the
United States. It only hears one side of any argument. A secret court
that is -- honestly, it is rewriting our surveillance laws. It is deciding
what we meant as a society, as a country, when we said the government can`t
indiscriminately spy on us.

To understand what this court is doing, though, we need to get into a
corner of the law-making process, a part of how we really do it, that most
in the country don`t think that much about.

The way that most of us think about the process of lawmaking is kind
of simple. Congress passes a bill, and then the president signs a bill and
maybe he`s got a lot of pens when he does it and gives the pens away. And
when that is done, when that ceremony comes to a close, that bill is now a

In President Obama`s first term, before all the gridlock paralyzed
Washington, this kind of thing, bills becoming laws, happened a lot.

Congress passed health reform in 2010 after a big, long, ugly fight.
And then President Obama signed health reform into law at a big fancy
signing ceremony. There were a ton of pens that day.

Then when it was over, when it was over, we had Obamacare. Congress
passed it. The president signed it. It was done. We had ourselves a
brand new law. That is how it works.

Frankly, we even have a cartoon about that. You guys remember lonely
little bill from the incredibly awesome "Schoolhouse Rock" series. Lonely
bill made this process, how a bill becomes law, really familiar to most

But there`s something "Schoolhouse Rock" left out. There`s something
that happens after the pens are given out and the bill becomes a law, this
other thing that happens, which is that people either, they don`t like the
law or they don`t understand what it means or maybe the law`s now old and
people aren`t sure if it applies to some new thing that`s come along.

And so, they take the law to the court. And sometimes it goes to the
federal courts and sometimes it goes all the way up to the Supreme Court.
And after that, the courts look at the law and they say, well, here`s what
the law means or what that word means or here`s what it applies to or
doesn`t apply to, or here`s whether it is constitutional or not.

And when they say that, when it reaches a highest court it will reach
and they make that decision, that court ruling becomes effectively the law.
Whatever that court decides, that is what the law actually means now. It
is a law we have to follow.

Take Obamacare, the original law that passed Congress, the one
President Obama signed with all of those pens. You can see him reaching
for them and putting them back down.

It said something pretty important. It said states that don`t expand
their Medicaid programs to accept millions and millions of new low-income
individuals. They lose all of the Medicaid money they get from the federal
government, all the rest of it, too. Not just the new Medicaid money, the
old Medicaid money, all of it and no state can afford that. And so, they
were all going to take the Medicaid money.

That provision was challenged in the courts, and the Supreme Court
ultimately decided that while Obamacare, itself, is constitutional, and
while it may say that you can`t have the Medicaid expansion if you reject
it, you lose all your money, they decided that part actually is not
constitutional. The court said states do not have to expand their Medicaid
programs in order to take their money. They tweaked the law.

And so, now, a bunch of them aren`t expanding their Medicaid programs.
So, Congress passed a bill. The president signed it into law, and then the
court had the ability to redefine the scope of it, to essentially remake
the law.

But here`s the thing and this is really important. This is how
democracy works. When judges make or change the law, like they did in the
case of Obamacare, their rulings are open to the public. Their reasoning,
their reasoning is open to the public. Why they did what they did.

Both sides of the argument get represented in court. We can listen to
those arguments. We know what they said. And since everything is open to
the public, Congress can then hear from voters then go back and rewrite the
law. To can make it clear, it can make it conform to the court`s
interpretation of the Constitution, whatever that may be.

The court is not the last word. The public accountable democratic
legislative process continues on. That is how law making works, that is
how the court works. That is how it works usually.

What we learned this weekend, thanks to extraordinary new reporting,
is that one section of our court system has been of operating in a
completely different way. It`s the court that decides how much the federal
government is allowed to spy on us. So, an important court, the spying
court, and it meets in complete secret.

This one court that meets in secret has been reinterpreting the laws
passed by Congress in a way that gives government vastly more power to spy
on the American people than it had before, than we thought we were giving
it when we passed the laws.

Today, "The Wall Street Journal" reported that this court`s decision
to redefine a single word in the Patriot Act, the word "relevant,"
"relevant," is the thing that changed the decision that allowed the
government to essentially begin collecting whatever information they wanted
on our communications in bulk, just hoovering it up.

When Congress passed the Patriot Act, do you remember that? It
allowed the government to compel businesses to demand they hand over
records and information as long as it could show those records were, quote,
"relevant" to an authorized investigation.

Relevancy was a key. It had to be part of the investigation. So, the
only way the government could get those kinds of personal records was to go
to court and prove they needed them. Prove they needed them because they
related to the case that they were working on. That is what Congress wrote
into the law, what the American people thought got signed with all those
little pens.

This court, however, this spying court, decided in secret that the
word "relevant" didn`t mean, like, relevant to the thing they were doing,
it just meant kind of everything. Congress didn`t mean relevant in the way
we normally understand it. They just mean, sure, collect whatever
information you want because it could become relevant some day.

They redefined a word in a law passed by congress and, thereby,
authorize the federal government to just hoover up phone records
indiscriminately. And we didn`t know about that until now.

And, look, it would be one thing if this were a normal court. If this
were John Roberts and Antonin Scalia, Elena Kagan, and Clarence Thomas, and
all the other, all the rest of the gang, remaking these laws in public
where we can hear what they`re saying and read their opinions and Congress,
after hearing from voters, could react legislatively to the rulings, could
say, yes, that`s what we meant by relevant or no, it`s not, this is what we
meant by relevant.

But that`s now how it`s happening. This is happenings in secret.
Laws passed by Congress are being rewritten by the secret court without any
sort of public comment or public review.

Over the weekend, "The New York Times" reported on more than a dozen,
a dozen classified rulings from this court that have created essentially a
secret body of law totally removed from public scrutiny. "The Times" said
this court has, quote, "quietly become almost a parallel supreme or the."
That, I think, is a scary quote enough -- a parallel Supreme Court out of

But the way this operates, it`s amazing. You`re -- I honestly don`t
think you`re going to believe it. It is unlike any other court in the
country. It would give the "Schoolhouse Rock" guys a run at their money if
they were trying to make adorable, explanational videos about this sort of

The 11 judges that serve on this court, who are chosen from throughout
the federal bench for 7-year terms, they`re all appointed, they`re all
chosen and appointed, selected by one person, the chief justice of the
Supreme Court -- every single one of these 11 judges right now serving on
this court right now, on the spying court, this very powerful court, every
one of them chosen and appointed by Chief Justice John Roberts. And John
Roberts, alone, gets to continue making those appointments until he either
retires or dies.

And those are really his appointments alone, those judges don`t need
to be confirmed by the Senate, they don`t need to be approved by a majority
of the Supreme Court. It is simply John Roberts, who do you think would do
a good job here?

And as you might expect from John Roberts, out of the 11 judges
currently serving on the court, 10 of them were appointed by Republican
presidents. Only one of them was appointed by a Democrat.

So, these 11 judges all chosen by Roberts, 10 of which are
Republicans, they meet in secret at this federal courthouse in Washington.
The presiding judge only hears the government`s argument before issuing a
decision. There`s no representative of the people or the other side. No
one even tasked with making the argument of the other side which, by the
way, is how it is core to how every other court works. You have to hear
both sides.

And then the decision this judge, this John Roberts-appointed judge
who only hears one side, can`t be appealed by the public. It can`t even be
seen by the public or criticized by the public because the public doesn`t
even know it happened. They can`t read the rulings. They`re not informed
of them. Nothing.

No other part of U.S. law works this way. No other part of the court
system works this way. After Congress passes a law and the president signs
it, it is this secret court that has the ability to go back and reinterpret
what they meant without the public and without most members of Congress
even knowing what they`re doing.

This is big news and thanks to this dogged reporting, we now know, we
know that the court is doing something we did not know they were doing
before. They`re not just telling the federal government, yes, what you
want to do is in accordance with the law or no, it is not. It`s not just
"mother, may I".

This court is reinterpreting the law. They`re making law. None of us
can see it. None of us can comment on it. But it affects all of us in a
really direct way.

Now that we know this is happening, a sort of odd bedfellow coalition
in the Senate, including Democrat Jeff Merkley and Republican Mike Lee are
pushing to declassify the rulings, so we can at least know more about what
the court is deciding.

According to my colleague, Greg Sargent at "The Washington Post,"
Democratic Senator Chuck Schumer of New York is now also lending his
support to the proposal and the top Democrat in the House, Nancy Pelosi,
said she supports a similar piece of legislation over in her chamber.

So that`s something. That would better. It would at least let us
know what this court is doing. But is this really the way it should work,
this secret court thing? Is this really the way we want to run our

Joining us now is Eliza Goitein, co-director of the Liberty and
National Security Program at NYU Law School Brendan Center for Justice.

Eliza, thank you so much for being here tonight.


KLEIN: So, right now, when the government goes before this court,
they have an incredible win record. I mean, it is the tiniest fraction of
the thousands of cases they bring before them that are rejected. That`s
even before you get into rewriting the laws.

What do we take from that? Because the thing that I keep hearing is
this kind of court structured the way it is, is very -- it`s possible that
it`s getting captured. You`re only hearing from the government and they`re
being too soft.

So, what can we take from this incredible win record?

GOITEIN: Absolutely. I think this is a flawed institution by design,
by concept. Because it operates in secret, because it only hears from one
party, as you said, always the same party, always just the government.

Because all the judges are appointed by one person, it`s very
difficult to see how a court like that could avoid capture, and if you look
at the win record that you were talking about, we`re talking about
somewhere about 34,000 applications since 1978, of which only 11 were
denied, and that`s one of those numbers where if you type it into your
computer to get the percentage, you get your decimals is way out -- it`s
something like 0.03 percent were denied.

So, it really is an incredible win record. And I think it`s very
important to understand that the adversarial process in our court system is
not a matter of giving some sort of procedural handicap to whichever party
happens not to be the government. It is the best way that any legal system
has found for getting to the truth. And when you only have one party
showing up, you`re just more likely to get the wrong answer.

KLEIN: Right. And now one thing that I want to separate out here is
we knew, we knew beforehand, we knew a week ago, two weeks ago, three weeks
ago that these courts were getting these 20,000, 30,000 applications and
accepting almost all of them. Sometimes they modify the application a bit,
but accepting almost all of them.

But I`m not sure we knew -- at least we weren`t sure about -- was that
they were in interpreting, reinterpreting the Patriot Act in very important
ways. That they had come up with new classifications like deciding that
your metadata, who you were calling and how long you were calling and who
you were e-mailing wasn`t the same thing as your communications.

Is that -- how new is this actually? How much did we kind of sort of
know this was going on and how much is this something of a shock to the
system to learn this court is engaging in sort of high-level
reinterpretation like that?

GOITEIN: Sure. We certainly knew metadata is not generally thought
of in the same way communications are thought of legally, they don`t have
the same protections under the Fourth Amendment. But there was still a
statute. Section 215 of the Patriot Act that said the government couldn`t
get that metadata unless it came in and showed it was relevant to an
authorized foreign intelligence or a terrorism investigation.

I don`t think anyone would have predicted that the court would look at
all Americans` metadata for all telephone calls that American makes and
would somehow come to the conclusion that all of this data could be
relevant to a specific authorized investigation.

I think, you know, you can predict that the court is going to lean in
the government`s direction for all the factors we discussed before. But
this is an extreme interpretation I think has taken a lot of people by

KLEIN: Eliza Goitein, thank you so much for being here today. It is
honestly kind of a shocking issue.

GOITEIN: Thank you.

KLEIN: I guess this is "big announcements by governors day" here on
the show.

First, we`ve got the epic battle for women`s rights in Texas. It got
even more complicated today after Governor Rick Perry shared his future
plans. We will have the very latest from Austin, next.

And later, on the interview, my guest will be former New York Governor
Eliot Spitzer who is making some very memorable headlines of his own.
Stick around.


HAYES: The astonishing battle for reproductive rights in Texas is
about to go to the next level. The president of plan the Planned
Parenthood, Cecile Richards, she will join me for that, next.


KLEIN: This right here, this is Holt Cat. Holt Cat, I love saying
that, is the largest Caterpillar dealership in the United States. We`re
not talking Caterpillar the bug. We`re talking the heavy machinery

The owner, he also owns the San Antonio Spurs basketball game and he
is one of the most generous donors to Republican donor Rick Perry`s
campaigns over the years. We are talking hundreds of thousands of dollars
generous. You do not have any friends this good, and if you do, I would
like to also be their friend.

So, it was no surprise when Governor Rick Perry wanted to stage a big
event launching his reelection campaign in 2009, he chose as a backdrop his
campaign donor`s dealership. But things did not go well at the Holt Cat
dealership for Rick Perry that day.

The whole event was supposed to stream live on the Internet to
millions of Texans. Instead of millions seeing it, only thousands did.
The live stream was compromised, something happened. Instead of seeing
Rick Perry in front of a local business launching his re-election campaign,
people saw an error message.

The Rick Perry campaign accused his primary opponent, Kay Bailey
Hutchison, of hacking. Her campaign said, we did not hack you, you just
are very bad with the computers on the Internets. The FBI investigated and
nothing really came of it.

That was the last time Rick Perry was at the Holt Cat dealership in
San Antonio for a big event, that was four years ago. But today, today, he
was back with a slightly different announcement.


GOV. RICK PERRY (R), TEXAS: I remain excited about the future and the
challenges ahead, but the time has come to pass on the mantle of
leadership. Today, I`m announcing I will not seek re-election as governor
of Texas.


KLEIN: It was like the decision, Texas governor edition.

So, Rick Perry is not running for governor again which is a very big
deal. He`s the longest serving governor currently in office in the whole
country. He`s the longest-serving governor in Texas history, in fact. And
for a while, during the 2012 Republican presidential primary there, he was
actually the front-runner. Rick Perry is a significant national figure.

But that announcement today, that is only one reason all eyes are on
Texas. This reason -- this is the other. Republicans in the Texas
legislature are back this week for the second special session dedicated to
accomplishing just one goal -- shutting down 80 percent of the abortion
clinics in the state.

The number of clinics in this great big state, huge big state, would
shrink to just five -- five clinics covering 270,000 square miles. During
the first special session, Texas Democrats were able to outmaneuver
Republicans and block that bill. State Senator Wendy Davis pulled off her
13-hour filibuster with the help of some very dedicated activists and very
dedicated protesters.

And all of a sudden, out of nowhere, Wendy Davis, she became a
household name. That was almost two weeks ago. It was a big win for them.

But Governor Perry then almost immediately called for a second special
session with the abortion bill first up on the docket. The state senate
held its second committee hearing today and again, just like last week and
the week before, thousands of people from all over the state showed up
today to testify. They wanted to speak in person to their legislature
about the bill.

There were so many of them that the committee cut off the line at
11:00 a.m. everyone in line before that got to speak. Everyone after that
had to submit their testimony in writing. Each person was allowed to speak
for a couple of minutes. Tonight, they are still speaking. They`ll be
testifying until about midnight local time.

And Republicans control the Texas legislature and so it is highly
unlikely they mess this up again. They will not let Democrats filibuster
and win this time. They are not taking any more chances.

They will pass this bill closing down 37 of the 42 clinics in the
state and Governor Perry could conceivably sign it into law by the end of
the week.

Meanwhile, in Wisconsin over the weekend, Republican Governor Scott
Walker signed an abortion bill forcing women to have mandatory medically
unnecessary ultrasounds. Like in Texas, that bill, too, would shut down
clinics intentionally.

That is the point of these kinds of bills. You inflate regulations
above and beyond the capability of the clinics so they have no choice but
to shut down. You make it so they can`t afford to comply then they have to
shut their doors. And here I thought Republicans hated intrusive
government regulations on small business.

Now, everyone expected Governor Walker would sign the bill and he did
sign it, no surprise there. The surprise was actually how he signed it.
Usually when governors sign bills, they want lots of attention for it.
They have public signings with lots of press. They make a big speech and
talk about all the people in the state who will be helped by the

Governor Walker did not do that. Instead, he signed the bill
privately the day after the Independence Day holiday when no one was paying
attention. And then he issued a written statement about it. Nothing to
see here at all, folks, you can move right along.

That law -- that law was supposed to go into effect today. But
Planned Parenthood and the ACLU filed a lawsuit challenging the law`s
constitutionality within hours of the signing. And today, a judge blocked
the law temporarily.

So, one Republican governor signs an antiabortion bill in private, and
another announces he`s not running for re-election just as his antiabortion
pet project is about to become a reality.

What is going on here?

Joining us to tell us what is going on here is Cecile Richards,
president of the Planned Parenthood Federation of America.

Ms. Richards, thank you so much for being here tonight.

Ezra. Good to be with you.

KLEIN: A few hours ago, a judge granted a restraining order against
the abortion bill in Wisconsin. It was supposed to go into effect today,
but now, it is on hold because of this lawsuit you filed.

Why do you believe the bill is unlawful, and why did you choose to sue
in this case?

RICHARDS: Well, look, it`s not just Wisconsin. I`m here in Texas
tonight. What we`re seeing across the country is state legislatures trying
to restrict women`s access to health care, and it`s unfortunately these
kind of bills are really intended not for the help and safety of women, but
really to shut down women`s access to reproductive care.

And that`s really what the judge, federal judge said in Wisconsin
today. It is incredible to be here in Texas, a state where we have the
highest rate of uninsured folks in the country, have for five years
running, and yet, Governor Perry and the Texas legislature are trying to
actually shut down even more women`s health centers through passing this
bill through a special session this week.

KLEIN: I would think that Governor Perry`s announcement that he`s not
running for re-election would create something of a problem for your
campaign because it obviously becomes harder to pressure a politician who`s
not expecting to go before the voters, at least that state`s voters, again.

So, what do you do now that you cannot threaten to derail his re-

RICHARDS: Well, look, Governor Perry has made his own political
agenda, put that ahead of women`s health care in Texas for pretty much
every year he`s been in office. I think it`s good news, actually, that
he`s decided not to run again. It`s time we actually put women`s health
care first and not sort of a political agenda.

And, look, in this state, we`ve seen thousands of people, again, even
just today, coming to the legislature to testify, saying that women need
access to preventative care, they need access to health care, and we rank
in one of the highest rates of unintended pregnancy in the country, teenage

And yet this legislature is doing nothing to advance women`s access to
care. In fact, what they`re doing is they`re trying to push more and more
health centers to close in the state of Texas at a time in which women`s
care is at an all-time low in this state.

KLEIN: You`re launching a bus tour this week to publicize the
Republicans in the legislature are doing with the abortion bill. Where are
you actually going on the tour? What do you hope to accomplish?

RICHARDS: Well, we`ll be kicking off tomorrow in Austin, and then
going to Houston and Dallas, and we hope that certainly folks will join us
and encourage anyone who`s watching that wants to join, go to stand with
Texas women on Facebook, to find out where the activities are going to be.

And really, again, I think, Ezra, it`s not just about this bill. What
Senator Davis did in your filibuster, what you`re hearing people testify
about for hours and hours again today at the Texas capitol is that we`ve
had dozens of women`s health centers already closed in the state as a
result of these really attacks on birth control, attacks on women`s access
to preventative care, access to cancer screening. And really this bus tour
is to make sure we get this story out of the capitol and talk a the real
impact on women`s lives.

What we`ve seen at Planned Parenthood is literally a whole new
generation of young women and young men who are saying they want a Texas
where people are, want to locate their businesses, where they can get
access to health care, where they can take care of their families. And
unfortunately the legislature, at this point, is putting politics ahead of
the health care of women.

KLEIN: Cecile Richards, president of the Planned Parenthood
Federation of America, thank you very much for your time tonight.

RICHARDS: Thanks, Ezra.

KLEIN: Coming up ahead, former New York Governor Eliot Spitzer. You
don`t want to miss this.


KLEIN: All right. This is a very exciting day.

If you are a member of the media, this is a very, very exciting day
because finally, at long last, like water in the desert, we get to talk
about sex scandals again. Sex scandals. That is way better. Sex scandals
-- they`re way better for ratings than protests in Egypt and NSA spying and

This, though, this is not the part of the show where we go for
ratings. This is the Ezra Klein challenge. It`s a part where I get to
talk about whatever peer reviewed chart heavy research I want as long as I
keep it under two minutes.

In tonight`s challenge, I`m going to do the seemingly impossible. I
am going to make sex scandals boring and peer-reviewed. In particular, how
long does it take to recover from scandal? Clock?

All right. We are not interested here in sex scandals, per se. We`re
looking at scandals in general. What do we know about how politicians
recover and survive scandals? We actually know quite a lot. A study
released in the "Social Science Quarterly" last month, of course, by far my
favorite bedtime reading, looked at every house race between 1972 and 2006.

And what it did in that was it separated the races where the member
had a scandal referred to the House Ethics Committee. And then the ones
where the member had no scandal like that. And you won`t be surprised to
learn, you win more often when you don`t have a huge scandal sitting in
your lap.

About 87 percent of just non-scandal, normal members of Congress win
re-election. Only 49 percent of scandaly (ph) incumbents win.

The really interesting part and the part that should make Eliot
Spitzer and his team happy is this graph right here. This graph shows what
we might call the political life cycle of a scandal. That blue line.
That`s members of Congress who have these scandals.

The black line is that members of Congress without them. It begins
two years before a scandal, this graph, and at that point everybody`s kind
of the same. Scandal guys, non-scandal guys, before they have a scandal,
everybody`s the same.

But then you hit the scandal. That`s that big dip in the blue line.
If you survive that, though, if you`re still around two years later, you`re
pretty much back to normal, and four years later, four years later pretty
much all that damage is gone. You have recovered.

Eliot Spitzer`s scandal was five years ago, so if a life cycle of a
scandal is four years, he should be pretty much back to normal by now.
That is the good news for him.

The bad news for him is he had the worst kind of scandal. Another
paper, this one by Lisa Brown and (INAUDIBLE) Channel Islands, found that a
scandal about money took 6.7 points off a member of Congress` vote share,
but a sex scandal reduced it by 9.2 points which is, of course, a lot

OK. So, scandals, politicians can survive them. Voters eventually
forget about them, but they care more about sex scandals than money
scandals. And we are done. Stop the clock.

I see that one second there. We were done.

That`s what we know. But that`s the kind of big empirical research
picture. When we come back, though, we`re going to get the more human
picture. Eliot Spitzer, the Eliot Spitzer, former governor of New York
Eliot Spitzer, will join to tell us why he is getting back into elected


KLEIN: All right. Pop quiz: which single industry spent the most
money on the 2012 elections? It wasn`t the oil industry, not the
pharmaceutical industry. It wasn`t lawyers or even lobbyists, actually.

The single industry that gave the most money directly to campaigns and
to super PACs during the 2012 election was -- there`s no drum roll, I`m
hearing -- Wall Street. The financial sector spent more last year on
politicians than any other single industry. They gave $61 million, $61
million to the Romney campaign and about $19 million to the Obama campaign,
which by the way is like you and me giving a quarter. But Wall Street was
also the biggest single sector donor to super PACs.

Wall Street spends a ton of money on politics and politicians, and
that might be why, although there is much Main Street versus Wall Street
grandstanding in Washington. Most politicians do not make a habit of
trying to actually take on Wall Street in any real way.

That was one of the things that shocked New York and anyone else in
the country paying attention, back in 2002, when Eliot Spitzer was New
York`s attorney general. That year, Spitzer`s office investigated several
Wall Street firms and found rampant conflicts of interest and ethics
violations in the information they were giving their clients and in the way
they were doing business.

But then they did something even weirder. They actually tried to do
something about it. Those efforts led to headlines like this at the end of
2002. Quote, "Wall Street firms ready to pay $1 billion in fines." Quote,
"It is rare for New York`s attorney general to wage a battle with Wall
Street, one of the biggest employers and campaign contributors in the

This was happening, though, and this was during his time as attorney
general. It gave Eliot Spitzer the moniker the sheriff of Wall Street.

Spitzer, of course, went on to become governor of New York state. He
won in a huge landslide. He was sworn into office on January 1st, 2007,
with his tough on Wall Street reputation right there with him.

But the only thing most people remember about Eliot Spitzer`s time as
governor is how it ended.


to all those who believed in what I tried to stand for, I sincerely
apologize. I look at my time as governor with a sense of what might have


KLEIN: A little more than a year after Eliot Spitzer assumed the
governorship, news broke that he had hired prostitutes which led to two
incredibly cringe-worthy press conferences during which he acknowledged the
charges and then resigned. That was in March of `08, when the sheriffs of
Wall Street was forced to leave office in a prostitution scandal.

Six months after that, in September that same year, Wall Street and
really the whole financial industry and really the entire U.S. economy and
pretty much the global economy imploded.

The prostitution scandal that ended Spitzer`s governorship meant he
was not around to work on the issue that he champed and built his career
on, at a time when it came into its own.

Eliot Spitzer announcing in "The New York Times" this weekend he is
now reentering politics and public life. He`ll be running in the New York
City comptroller`s race, seeking the Democratic nomination against
Manhattan borough president Scott Stringer.

So, Eliot Spitzer thinks this is the right time to make his comeback.
The question is, will anyone agree with him?

Joining me now for the interview is Eliot Spitzer.

Governor Spitzer, thank you so much for being here tonight.

SPITZER: Thank you, Ezra. Thank you for the kind words and I cringed
when I watched the tough ones, but you gave a fair recitation of what --

KLEIN: I appreciate that.

You resigned -- I want to ask you something about what might have
been. You resigned right on the eve of the financial crisis. What was it
like watching that unfold given your history on the issue and having taken
yourself out of being an active participant in the political process around

SPITZER: It was painful. Obviously there was much pain related to
other issues. But specifically on that issue in February of `08, I
testified before Congress about subprime debt and told the story of how we
had begun to investigate subprime debt. We made the first case in 1999.
In `04, I was pilloried for investigating it and made fun of. The
conservative voices, oh, subprime debt is great. And we were saying, no,
it was going to metastasize in a dangerous way.

And in February of `08, just a month before I resigned, I explained
how the Bush administration, the OCC, had forced us to litigate all the way
to the United States Supreme Court to investigate an issue that we believed
was fundamentally destroying our financial system.

Everybody blockaded us. It was not just the analysts. It was the
mutual funds. It was insurance. And it was painful to watch, and we have
all paid a price for not being diligent in understanding how markets really
work and how Wall Street needs to be policed.

KLEIN: When you look back, do you think stepping down was the right
thing to do? Or do you regret it?

SPITZER: Both. Obviously I regret it because I was forced to do it.
I think it was also the right thing to do. I believe in accountability,
and I believe in paying a price when one violates an obligation. I
violated that obligation. Whether I paid the right price is the issue, I
suppose, the public will -- I will ask the public to weigh and decide if
I`m on the ballot this September and November. But I believe it was the
right thing to do, and as painful as it was and as difficult as it was.

KLEIN: When you were making the decision to announce to get back into
politics, was there a party that looked at Anthony Weiner leading in the
polls in New York and Senator Vitter who has done fine in Louisiana and
Mark Sanford making a comeback and said, you know what, the American vote
is more forgiving than people sometimes give them credit for. Was that
part of the process?

SPITZER: I think my sense that the public has a capacity to forgive
has grown and I`ve understood that from what I call my walking down the
street poll sensitivity. Anybody who`s in politics interacts with people,
and even though I`m not in politics, obviously, I`m well enough known so I
talk to people. I enjoy that process.

When you talk to people, you understand their emotions. I see that
forgiveness and willingness to give folks a second chance and obviously the
examples you just gave are evidence of that. Whether that will transfer to
me is an open question. Every case is different. And that is why there`s
massive uncertainty, risk, and as there should be, and is rightly the case
that there`s risk.

So, yes, certainly I understand that sense of forgiveness. It is a
quality that I think we like and respect in human nature. The capacity to
forgive. But it`s sometimes parsimoniously afforded to people.

KLEIN: So, you`re now running for New York City comptroller. One of
the duties in that job will be to manage $140 billion in pension assets.
That is where a lot of the job`s power comes from. You will go from being
the sheriff of Wall Street to one of their largest customers.


KLEIN: How do you -- how do you intend to use that? What is your
sort of vision for how that will work?

SPITZER: Right. I`ve spoken at some length over the years about the
capacity of controller, state controllers, municipal controllers. Those
who control pension funds. Those who are the institutional investors to
use the rights and obligations I would say of ownership to reform corporate

We tried to regulate and prosecute our way to good corporate
governance. At the end of the day, I`m not sure that will ever work. You
can`t regulate or prosecute your way to good judgment.

Ownership brings obligations. Ownership trumps regulation in terms of
the capacity to put good directors in place, to put good employees, good
CEOs, risk management. I think we have abdicated, we as owners, have
abdicated that responsibility because the institutional investors in our
market place themselves have become passive. I mean, the phrase, passive
institutional investors has sort of become a cliche but is an apt
description of how the major pools of capital fail to use the ownership
capacity they have.

I could get into gnarly weedy detail that would be good for your two-
minute segment on this. I`ll spare you and the audience on that.

But I think the unfortunate reality is institutional investors have
failed. Controllers can be a significant and important remedy in this.

I`m not talking about political intervention. I`m talking about
management -- building a better widget, running a better company.
Ownership requires that participation.

KLEIN: In a certainly separate approach to job, you`ve been now
writing and broadcasting and speaking and sort of thinking about these
questions five years outside the political arena. How do you think your
approach to serving in public office has actually changed? How do you
think, if you do think, you`ll be public as a public servant due to the
period outside of actual politics?

SPITZER: Well, let me put it this way. I don`t believe any less or
with any less fervor in the things I was fighting for, whether the Wall
Street issues or the other. I`m not going to go through that litany.

But I think I appreciate a bit more that sensitivities of others
sometimes need to be appreciated. We were tough. We played hard. I`m
very glad we did. Better to fight and lose than not fight at all is
something I generally believe in when you`re right on the principles and
right in terms of the outcome you`re seeking.

But I think if I`m fortunate enough to be elected comptroller, I`ll
build coalitions with other institutional investors, with the mayor, with
the city council, to move an agenda forward. I think that`s an important
part of governance. That is necessary to appreciate and, perhaps, I wish
as governor I had been able to do that more. It was not possible in
Albany, but I wish I had done that a bit more.

KLEIN: Eliot Spitzer, the former governor of New York and a
candidates for New York City comptroller -- Governor Spitzer, I sincerely
appreciate you being on the show tonight.

SPITZER: Ezra, thank you for the invitation.

KLEIN: Is it too soon -- is it too soon to have Internet nostalgia?
We bid a fond farewell to a Jurassic era web favorite. It`s coming just


KLEIN: If you`ve been following the events in Egypt, you know that
last week a wave of genuinely huge protests against Egyptian President
Mohamed Morsi toppled his government. In came the Egyptian military, they
grabbed the reins, they took control of the country, they pushed Morsi out
until elections can be held.

You might have thought that to some degree or another, these were
protests just like the ones we`re seeing in Brazil and in Turkey, that
they`re expressions of discontent with the government. And to some degree
they were.

Today, however, something changed. Today is the day when the protests
in Egypt became something different and something much more dangerous.
Today, we moved. We moved from something that still looked like protests
kind of, even more so, and maybe they can still have an OK ending. Today
that changed into something that looks more like the beginning a civil war.

Early this morning, Egyptian soldiers reportedly opened fire on a
group of supporters of ousted President Mohamed Morsi as they gathered
outside a building where he is believed to be detained. At least 51 people
were killed, and more than 300 were wounded.

The Egyptian military claims the soldiers fired at the crowd in
response to shots fired by armed assailants. People at the scene deny the
military was provoked in any way. But what happened today was the single
deadliest incident since the ouster of President Hosni Mubarak in 2011.

And what happened today, it`s a game changer for the future of Egypt
and not a good one.

In response to the shootout, President Morsi`s Muslim Brotherhood,
which is powerful and is big, is now calling for an uprising across the
country. The group`s political arm is demanding, quote, "an uprising by
the great people of Egypt against those trying to steal their revolution
with tanks."

Well aware of what all this might mean for Egypt, the interim
president, who is a guy appointed by the military, quickly ordered an
investigation into the deaths and is urging restraint and calm throughout
the country. Also, today, the hard-line ultra-conservative Islamist party
al-Nour, the only party that had initially supported the ouster of
President Morsi, has withdrawn from talks to choose an interim president.

A spokesman for the al-Nour Party said its decision was a reaction to
the massacre of hours earlier.

Well, the party did withdraw from talks today. Just this past
weekend, they were able to throw their weight around relating to the
appointment of the interim prime minister. Reports this surfaced that
officials had named pro-reform leader Mohamed ElBaradei interim prime
minister. But then later in the day, those reports were retracted.

The former U.N. guy it turned out was too secular for al-Nour`s taste.
But they did give their stamp of approval to the former head of Egypt`s
investment authority in a radio interview.

So, between the ultra conservative Nour Party, the ousted Muslim
Brotherhood, the pro-reform movement and the many other groups, there are
now a lot of players who all have a long list of grievances. And now there
is no political process, no safe way to resolve them.

The military opened fire. They opened fire on a crowd of Muslim
Brotherhood Morsi supporters. The Muslim Brotherhood now says it has 51
martyrs -- not just dead supporters but martyrs.

And so, now, how does the Muslim Brotherhood cut a deal? How do they
come in? How do they back down?

Now, they have to play this out so their people didn`t die in vain.
So in today`s events there is a rift developing between what the public
wanted to do, which is to overthrow the president, to change the system,
and what is happening now, which is what looks like the prelude to a
possible civil war.

Today is the day this became not just a complicated and unhappy
transition in Egypt, but the possible descent of the country into sustained
violence and instability. It is not a happy day.


KLEIN: Tonight, we mark the passing of an old friend, a friend who
died today after many years of neglect, AltaVista. Born during the heady
days of late `95 in Silicon Valley, back when it was anything goes in the
World Wide Web, AltaVista was the hot new search site on the Internet
superhighway. It was able to scan more web pages than any other search

With 250 million Web sites indexed and 2.5 million search requests a
day, AltaVista was the digital flashlight that helped guide the way when
the Net was at a third of today`s volume. If you were surfing the Internet
then, you were probably on AltaVista.

If you were really old school, you used it back when it looked like
this, back when it was praised for its minimalist interface. Or maybe you
came a bit later when it was slick and yellow and stuff. Slick for the
Internet of the `90s.

In its heyday, by `99, AltaVista had more than 80 million hits a day.
It even had a TV campaign.


KLEIN: Hulk search!

But along came Google and the good times ended for AltaVista, even
when Internet giant Yahoo bought it in 2003, never quite were able to turn
it around.

People liked it when it was the only game in town, but no one ever
said, ah, let me AltaVista that. But now Google, Google`s a verb.

Last week, Yahoo announced they would be retiring the veteran search
engine, which was a surprise to most who figured AltaVista had already died
years ago. So, everyone, apparently except the people of Pawnee, Indiana.


UNIDENTIFIED FEMALE: So I looked you up on AltaVista and I found out
the last seven towns you`ve gone to ended up bankrupt.

UNIDENTIFIED MALE: OK. First of all, why does everyone in this town
use AltaVista? Is it 1997?


KLEIN: So is if you fired up your computer ready to search something
today on AltaVista, this is what you got. A redirect to yahoo`s search
page because, today, AltaVista went the way of Netscape and Geocities and
Prodigy and the beloved but mostly dead Friendster. All now buried in that
Internet graveyard in the cloud.

This is the way the net, a new upgrade to download every day, better
designed improved features and when an old Web site dies, unclicked for
years, nobody mourns. Nobody produces an episode of VH1 "Behind the
Browser." No cyber wall or cell phone light vigil.

But there`s been too much Internet death lately. First, the untimely
demise of Google Reader last week and now this. Attention must be paid.
AltaVista, laid to rest today at the age of 18.

That does it for us tonight. Rachel will be back tomorrow.


Have a great night.


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