The Rachel Maddow Show, Transcript 01/05/09

Guests:
Richard Engel, Andrea Mitchell, Kent Jones, Roland Burris, Evan Bayh
Transcript:

RACHEL MADDOW, HOST:  Mr. Burris, I could offer a dog if he is looking for an ally at this point.  It might actually be a good move for him.  Mr.  Burris will be joining us here in just a minute.

Thanks a lot, Keith.  Appreciate it.

KEITH OLBERMANN, “COUNTDOWN” HOST:  Sure.  Thanks.

MADDOW:  And thank you for staying with us at home tonight.

We‘ve got an on-the-ground update in just a moment, from Richard Engel, who is near the Israel/Gaza border.  We‘ve got a look at the president-elect‘s big anti-torture news today.  And we‘ve got further strange details from the White House about why the Obama family has to live in a hotel this week while the Obama daughters start at their new school.  That is all to come.

But first, for the first time since an exhaustive very public recount started two months ago, there has been a pronouncement from state officials in Minnesota naming that state‘s next U.S. senator.  The state‘s canvassing board declared that Democrat Al Franken defeated incumbent Republican Senator Norm Coleman by 225 votes.

(BEGIN VIDEO CLIP)

AL FRANKEN, MINNESOTA SENATOR-ELECT:  After 62 days of careful and painstaking hand inspection of nearly 3 million ballots, after hours and hours of hard work by election officials and volunteers across this state, I am proud to stand before you as the next senator from Minnesota.

(END VIDEO CLIP)

MADDOW:  Maybe.  The election results will not actually be certified until legal challenges in the race are completed.  And the incumbent Republican, Norm Coleman, he says that legal challenges there shall be.  So, national politicos, commence fighting.

(BEGIN VIDEO CLIP)

SEN. HARRY REID, (D) SENATE MAJORITY LEADER:  There comes a time when you have to acknowledge that the race is over.  The race in Minnesota is over.

SEN. MITCH MCCONNELL, ® SENATE MINORITY LEADER:  The race in Minnesota is not over, until the people in Minnesota say it‘s over.  And the way you say it‘s over in Minnesota is somebody shows up here with an election certificate.  It‘s my understanding that ain‘t going to happen tomorrow.

(END VIDEO CLIP)

MADDOW:  On Capitol Hill today, Senator Norm Coleman‘s staff was blocked out of his office because the Senate Rules Committee declared that Coleman‘s term as senator was expired.

So, all this means that if President-elect Obama wanted to spend his first big post-election school day in Washington counting up his party‘s political strength in the United States Senate, a complete count is not yet possible.  Not even remotely possible.  In addition to the Al Franken/Norm Coleman saga, there‘s also the even more dramatically unresolved Senate seat from Illinois.

Former Illinois attorney general—Rod Blagojevich‘s designee for that Senate seat—Roland Burris, will be my guest here in just a moment.  He is in Washington tonight under the assumption that he will be part of the 111th Congress when it convenes tomorrow, that is not at all a foregone conclusion.

The secretary of the Senate—yes, there is a secretary of the Senate, who knew—today, the secretary of the Senate rejected the certification of Burris‘ Senate appointment because it did not include the signature of the secretary of state of Illinois, a man named Jesse White.  Now, that‘s a dramatic development in terms of the plot here, just terms of the saga continuing.  It‘s legally interesting, in terms of whether this appointment really can be uncertified and therefore nonbinding.  And it is politically interesting in part because it illustrates that the fight over Mr. Burris‘ nomination does not fall entirely on racial lines.  Almost nothing ever does.

Mr. Burris‘ supporters like Congressman Bobby Rush has explicitly cited race in their campaign to see Mr. Burris seated.  Congressman Rush called the Senate yesterday, quote, “the last bastion of racial plantation politics in America.

Now, on the other hand, Jesse White, who is also African-American, he withheld his signature as secretary of state, quote, “To make a statement about Governor Blagojevich‘s appointment under fire.”  Mr. Burris himself publicly rejected the racial argument being made on his behalf, saying at a press conference today that he cannot control his supporters.

Meanwhile, the Illinois House committee investigating whether to impeach Gov. Blagojevich has asked Mr. Burris to appear in Springfield, Illinois, on Wednesday.  Mr. Burris, however, said no.  That would have to wait until Thursday because on Wednesday, he has important Senate business in Washington.

(BEGIN VIDEO CLIP)

UNIDENTIFIED REPORTER:  You‘ve been subpoenaed to appear before the House Impeachment Committee.

ROLAND BURRIS, FORMER ILLINOIS ATTORNEY GENERAL:  And we are handling that as well.

UNIDENTIFIED REPORTER:  How are you going to do that?

BURRIS:  Well, I am the magic man.

UNIDENTIFIED REPORTER:  Are you planning to travel to Springfield?

BURRIS:  On Thursday.

UNIDENTIFIED REPORTER:  On Thursday, but not on Wednesday?

BURRIS:  I‘m a United States senator.  They cannot stop me from doing my senatorial duties.

(END VIDEO CLIP)

MADDOW:  Senatorial business—Roland Burris does consider himself to be senator as of last Tuesday.  And he is consistent about this.  He called himself senator yesterday when he told people at a Chicago church, quote, “The Lord has ordained me this.”

And today, before boarding a Southwest Airlines flight from Chicago to BWI, Mr. Burris stated his position very plainly.

(BEGIN VIDEO CLIP)

BURRIS:  I am the junior senator according to every law book in the nation.  Why don‘t you all understand that what has been done here is legal?  I mean, that‘s legal.  I am the junior senator from Illinois.

(END VIDEO CLIP)

MADDOW:  Even if Governor Blagojevich is impeached tonight, even if that magically happened, it does appear to be true that the governor has legally-appointed Roland Burris to be United States senator.  The question, though, is whether or not the United States Senate will accept that appointment, and whether they ought to.

Joining us now is the man at the center of the storm, Governor Rod Blagojevich‘s choice to fill Barack Obama‘s Senate seat, former Illinois Attorney General Roland Burris.

Mr. Burris, thank you so much for coming back on the show with us tonight.

BURRIS:  Rachel, it is my pleasure.  Thank you.

MADDOW:  I have to say that in watching you over the last few days, seeing your public appearances, you seem like you are having the time of your life.  Is this fun?

BURRIS:  Rachel, I am just sorry all this theater is going on around the appointment.  And I‘m anxious and ready to go on behalf of the 13 million people of my state.  And certainly, I enjoy the public service and the public eye, but, you know, I would rather not have all of this drama.

MADDOW:  Well, the Senate Democrats initially said that they would not seat any Blagojevich appointee, full stop.  That seems to be changing.  Senator Reid said yesterday that it‘s open for negotiation.  Are you negotiating now with Senate Democrats to take that seat?

BURRIS:  Well, no.  I have had no direct contact from Senator Reid.  What we certainly are looking for is the opportunity to meet with him.  And I wish we could do it—could have done it today or tomorrow, but his schedule just won‘t permit it.  So therefore, we will probably sit down and meet on Wednesday.

MADDOW:  Are there any negotiations happening by anyone on your behalf if you are not doing them directly?

BURRIS:  I—I don‘t think so.  I mean, I hear all this from the media, that there are offers and attempts to compromise, but I don‘t have any direct knowledge of anyone being in touch with me or my staff to compromise.

And, of course, you know, the only compromise that we can come to is recognize the fact that the governor of the state of Illinois has legally appointed me, Rachel, and that I am the junior senator from the state of Illinois.  And I just hope and pray that we don‘t keep, you know, stringing this out when we have got more important business to take care of.

I mean, this country and my state are in just a crisis.  And we don‘t need this distraction.  I have the experience, the knowledge of Illinois government, a four-time elected state official of my state, and I am prepared, ready, willing and able to go to work on behalf of the people of Illinois and the people of America.

MADDOW:  If the Senate Democrats said that they would drop any objections to seating you—which, again, they have said are not because of you but because you were appointed by Governor Blagojevich while he is in this—he‘s under this cloud of suspicious and is probably due to be facing indictment sometime soon—if they agreed to drop objections to seating you in the United States Senate on the condition that you wouldn‘t run for election in 2010, would you consider that?

BURRIS:  Well, Rachel, when I had a press conference in Chicago early on, I guess it was—it must have been late November or early December, I had said that, you know, I would be the interim senator.  And when my supporters and friends across Illinois heard that, they said, Roland, you know, you have been elected four times statewide.  You are the one who know this state.  Why would you only be a seat warmer?  You know, we want you to be elected in 2010 so you can continue to represent us.  I mean, they came down hard on me, Rachel.  Rachel, so I had to kind of rethink my position on that issue.

So you know, I would be more than likely to say, well, you know, how do I know?  I remember my good friend Barack Obama saying he wouldn‘t run for president, but we are going to inaugurate him on the 20th of January.  So, you know, people have the opportunity and the right to change their minds.

MADDOW:  Nobody wants there to be—I can‘t imagine there‘s anybody who would admit to wanting the United States Senate without any African-American representation.  We have had that for far too long in this country.  May I also go out on a limb here, though, and say that nobody wants any senator to be appointed by a governor who is under such a heavy cloud of suspicion like Governor Blagojevich right now.  The people of Illinois have to worry about the effectiveness of you or anybody else holding that position after having been appointed under such difficult circumstances.

Congressman Danny Davis reportedly rejected this offer from Governor Blagojevich.  Why didn‘t you, because of the cloud that it would put over your time in office once you ascend to the Senate if you do?

BURRIS:  Well, there‘s—I don‘t see any cloud that it would put.  I have run statewide in Illinois.  I have served statewide.  And my good colleague Congressman Davis, you know, has been a congressional representative.  He has not been throughout the state of Illinois.  So therefore, it would be certainly difficult for him to build up that base over two years, you know, if he sought to run for reelection.

               

MADDOW:  Just to be clear, you think that he would—he said no because he is less qualified for the job than you are?

BURRIS:  No, I‘m not—qualified is not the answer.  What he would need to do is raise the money to get name recognition, and all of that would be a harder road to hoe than it would be for me.  That‘s what I mean by that, Rachel.  I‘m in no way talking about my friend, Congressman Davis, please.

MADDOW:  Let me ask you one last question about your friend, Congressman Bobby Rush…

               

BURRIS:  Sure.

               

MADDOW:  … who has been very, very vocal in support of you, and he has played the race card here very deliberately.  He said—and I want to make sure that I get this quote exactly right—“we are just faced with a hard-headed room of people in the Senate who want to keep an African-American out of the Senate.”

Do you agree with him, that that is what is going on here?

BURRIS:  No, I do not agree with the congressman what‘s happening. 

And I‘m not responsible in terms of what my supporters say.

               

Rachel, look at this.  Illinois is the most progressive state in America.  We elected four African-Americans statewide, two of them to the United States Senate, two of them as constitutional officers.  And we in America just elected a son of Illinois as its president.

I was elected four times as a state official, the first black ever elected to a constitutional office in the history of the state of Illinois.  In no way would I bring up race as a reason for winning or not winning an election.  I couldn‘t have done it and survived that long.  So the people of Illinois know me.  I don‘t deal with race as a limiting factor or as a controlling factor of an election.  I never have, never will, and don‘t see it in that fashion.

MADDOW:  Former Illinois Attorney General Roland Burris, Governor Blagojevich‘s choice to fill Barack Obama‘s Senate seat.  Sir, all eyes on you tomorrow when you head up to the Senate.  Good luck to you and thank you again for joining us.

BURRIS:  Thank you very much, Rachel.

MADDOW:  Mr. Burris is not the only Illinois politician who debut in Washington today, so did President-elect Barack Obama.  He met with congressional leaders, he spoke to the press, he announced a whole slew of appointments that broke some glass ceilings and broke a few political proverbial eggs.  We will have more on that in just a moment.

And, NBC‘s Richard Engel will be reporting from Gaza for us tonight.  Well, from the Gaza border.  War is raging on there with no progress yet towards a cease-fire.

(COMMERCIAL BREAK)

MADDOW:  War in the Gaza Strip continues unabated tonight.  Ten days into the Israel military assault on Gaza, the U.N. and Palestinian authorities put the death toll at 540, including an estimated 200 Palestinian civilians.

For some physical perspective here, this is the Gaza Strip.  It has

the Mediterranean Sea, its western border; Israel on the north and east;

and then Egypt, which has closed its borders to the Palestinian refugees,

that‘s down to the south.  This is all happening—this whole military

incursion is all happening in an incredibly small, concentrated, densely-

populated place.  Israel itself, of course, is only a little larger than

the state of New Jersey, which takes all of about an hour and a half to

drive from bottom to top.  And Gaza in total is only about 140 square miles

it‘s about the size, the physical area size of Detroit or Philadelphia.

All the while, throughout the 10-day Israeli military campaign, Hamas has continued to launch rockets into southern Israel.  After the U.S.  yesterday used its veto power to block a U.N. Security Council statement calling for an immediate cease-fire, President Bush today made his first public comments on the conflict, saying he was still hopeful for a cease-fire and he blamed Hamas for causing the violence.

The French president, Nicolas Sarkozy, having traveled to the West Bank seemed to speak for the European Union today when he called for a humanitarian truce as soon as possible.  Despite the talk, there is scant reporting of any actual progress toward a cease-fire.

So, what now?  How does this end?  When does this end? And to what end?

Well, joining us now from the Gaza border is Richard Engel, NBC News chief foreign correspondent.

Richard, I understand foreign journalists are not being allowed into the Gaza Strip itself.  Where are you now, and what are you seeing?

RICHARD ENGEL, NBC NEWS CHIEF FOREIGN CORRESPONDENT:  I‘m on a ridge line just to the north of the Gaza Strip.  We are outside of the town of Sderot.  And journalists have not been allowed in.  A group of reporters were supposed to have been given access today.  We were told just about 20 minutes before we were supposed to enter Gaza that the trip had been canceled.

I‘ve spoken to Israeli officials and they are actually, surprisingly open about why they are not allowing journalists inside.  They say they don‘t want too much information coming out of Gaza.  They are afraid it‘s going to disrupt their military offensive and they think that it is better to control the information coming out of Gaza itself.

MADDOW:  Israel has said that their goal is to stop Hamas from shooting rockets into southern Israel where you are now.  Do we know whether they are also trying to oust Hamas from power in Gaza?  A lot of people are speculating toward that end.

ENGEL:  I spoke to a senior Israeli intelligence official today.  And he said the immediate goal is to stop the rockets.  That is the tactical purpose, if you will.

The larger goal is to crush Hamas.  It is to bring it to its knees according to this official.  Not necessarily remove it from power, but to force it to beg for a truce.  They don‘t want Hamas to grow stronger than it is already.  They don‘t want it to become a Hezbollah, the militant organization in southern Lebanon on Israel‘s northern border.

So, they decided right now was the opportune time to stop the rocket fire and destroy as much as possible the government that is in charge of the Gaza Strip at least, Hamas.

MADDOW:  Can we tell physically what types of sites within Gaza the Israeli military is targeting?  Obviously, the concern is that civilian casualties and news of civilian casualties may undercut any effort to crush Hamas by creating widespread sympathy for them.

ENGEL:  Which is one of the reasons they are not allowing reporters into the area.  I asked an official today why they are not allowing westerners in because there are images coming out of the Gaza Strip, many of them by Palestinian reporters and many of them showing the humanitarian disaster.  And this Israeli official said, “Well, if we let western reporters in, then it would just be more bad news coming out of the Gaza Strip.”

The Israeli air force has hit more than 1,000 different targets since this offensive began.  They included 30 tunnels; these are smuggling tunnels that are between the southern Gaza Strip and Egypt.  They are also hitting Hamas safe houses.  In particular, they are trying to target the launchers that Hamas is using.

Hamas has many rockets of different sizes but they don‘t have many rocket launchers and they say that is the goal.  That is also the reason they divided the Gaza Strip into several pieces.  Israeli forces cut the Gaza strip in half.  They hope by doing that, they‘ll be able to stop the resupply, stop the rocket launchers which are moved by vehicles, from moving from the southern part of the Gaza Strip where they are stored to the north, right behind me, where they are fired into Israel.

MADDOW:  Richard, do you have any sense, any information about whether or not this conflict is still escalating?  Whether there is any chance of a cease-fire or a sort of push in the fighting for diplomatic purposes?

ENGEL:  It doesn‘t seem so.  There was a flurry of diplomatic activity here today with the French president in town.  The Israelis rejected that.  And according to senior officials I‘ve spoken in Israel, they believe they need 10 more days to complete the military offensive.  And they feel they are under no real international pressure to stop it.

MADDOW:  Is there any effort over the course of those next 10 days, will there be any effort to allow humanitarian assistance or medical assistance into Gaza?

ENGEL:  Some humanitarian supplies have been getting in.  Some have come in through Egypt, others supplies have come in through Israel.  But they are not—it is expected to intensify over the next coming days.

The Israeli officials say now—they initially started with air strikes, and then they moved in with a ground force.  Now, they are advancing deeper and deeper toward the populated areas.  They expect as they go into the big cities, Gaza City in particular, the fighting will intensify.

Today, there was some street-to-street, house-to-house fighting on the outskirts of Gaza City.  And that is not the kind of thing that the Israelis have wanted to do but they feel that it is necessary, and they expect that will come to that, will intensify over the next several days.

MADDOW:  Richard Engel, NBC News chief foreign correspondent—

Richard, thank you so much for joining us tonight, from the border with Gaza.  Stay safe.

ENGEL:  My pleasure.

MADDOW:  Here is Barack Obama‘s to-do list today.  One, pose for grip and grin photos with every politico in town.  Two, thumb nose at the Bush administration by loading up the Justice Department and the CIA with appointees who are, on-the-record, against torture. Three—actually, that‘s a pretty good day‘s work right there.  We‘ll have more on that to come.

(COMMERCIAL BREAK)

MADDOW:  President-elect Obama today picked a new director for the CIA.  A choice that is causing ripples among his fellow Democrats.  He also chose his solicitor general and the new head for the Office of Legal Counsel, an office no one used to pay any attention to at all until the Bush administration decided that was where they‘d keep the magic wand that would make illegal stuff legal because they said it was legal.

NBC‘s Andrea Mitchell and Senator Evan Bayh—still to come on tonight‘s show.

First, though, it‘s time for a few underreported holy mackerel stories in today‘s news.  The next leader of the free world and his family arrived in D.C. over the weekend, and they are living in a hotel room.  The Obama kids, Sasha and Malia, started school today at their new school in Washington.

So, the family had asked to move in this weekend to Blair House, which is right across the street from the White House.  It‘s the official guest house of the president.  It‘s where heads of state and visiting dignitaries stay.

As reported a couple of weeks ago, the response from the White House to the Obama‘s request—was “no.”  The White House said no to the Obama family.  “You are not welcome to use Blair House.  It‘s booked.”

It‘s booked?  We called the White House Office of Protocol today to find out just what is going on at Blair House that cannot be rescheduled or pushed back or moved elsewhere to make room for the new president of the United States and his family.  The Office of Protocol would not give us the schedule of events, but the First Lady‘s spokeswoman did tell us that President and Mrs. Bush had, quote, “graciously offered the Obama family the opportunity to stay at Blair House starting January 15th,” which is 10 days after the Obama girls start school.  They actually used the word “graciously” about themselves.

So, in the meantime, the Obamas will have to stay at a hotel.  They are staying at the Hay-Adams Hotel at 16th and H.  It actually does look like a rather gracious place.

If you are watching the show right now and you are a Washingtonian,

maybe a fancy politico type who gets invited to events at Blair House, say

you‘ve been invited to an event at Blair House sometime in the next 10 days

I have a personal plea for you.  Email me your invitation.  I don‘t want to crash it, I will not show up.  I‘m just desperate to know what these events are that the White House thinks are more important—a more important use than the president‘s guest house than hosting the new president?

Desperate—I am desperate to know.  Rachel@MNSBC.com.  Just between us, OK?  Thank you.

And, finally, the Republicans are waging another election campaign right now.  In this one, they are guaranteed to win.  It is the six-way race for the leader of the Republican Party.  Today, the candidates held their first ever RNC chair candidates debate at the National Press Club—sponsored by the League of Women Voters or a national media organization?  No, this is the Republican Party chairmanship we‘re talking about, so the debate was sponsored by Americans for Tax Reform, a group run by a man who says he wants to get government down to the size where he can drown it in a bathtub.

One highlight of today‘s debate was the current chairman, Mike Duncan, admitting that President Bush‘s biggest mistake was the prosecution of the war.  Former Maryland lieutenant governor, Michael Steele, listed a few mistakes: the war, Katrina, the bailout.

The RNC‘s 168 members will choose a new chairman on January 28th, at the GOP‘s winter meeting, but they will have a couple of public forums, in the meantime, to vent their differences between the candidates.

One Republican consultant told Politico.com today that the race is contentious because Republican activists are angry.  The actual quote from this consultant, quote, “Some people are (EXPLETIVE DELETED) off at Americans for Tax Reform President Grover Norquist.  Some people are axed off at the Conservative Steering Committee.  Some people are (EXPLETIVE DELETED) off at RNC Chairman Mike Duncan.  Some people are (EXPLETIVE DELETED) off at social conservatives.  The social conservatives are (EXPLETIVE DELETED) at leaders in Congress.  Everyone is basically (EXPLETIVE DELETED),” end quote. 

Wow.  And a happy new year to you guys, too.

(COMMERCIAL BREAK)

MADDOW:  You think you had the queasy Sunday night feeling about going back to work today.  Well, all the football highlight shows in the world probably could not make that feeling go away for Barack Obama.  Today, for Obama, was essentially the toughest, busiest first day back in the history of first day‘s back.  And as most first days typically go, it was divided between the political saying, “hi, how are you” part and the getting down to business part. 

Now, politics-wise, Obama returned to Washington in search of a new commerce secretary nominee.  New Mexico Gov. Bill Richardson withdrew his nomination because of a federal investigation into links between state contracts and campaign contributions back home in Santa Fe. 

With the Richardson kerfuffel in the background and undoubtedly some plan B commerce secretary vetting happening behind the scenes, the president-elect today made face time with just about every other famous politico in Washington.  The nation‘s capital was transformed into “get your picture taken with Obama” day.  There was the photo-op with House Speaker Nancy Pelosi.  There was the requisite “how do you do” with Senate Majority Leader Harry Reid, the bipartisan “say cheese” meeting with Republican House Minority Leader John Boehner and Senate Minority Leader Mitch McConnell.  Oh, for the power to read minds for this awkward photo-op. 

That was the political part of Obama‘s day.  But there was also the comparatively underreported executive part of his day.  The business part.  For today, that was the floating of a handful of major appointments. 

President Clinton‘s former chief of staff Leon Panetta was reportedly tapped to be the new CIA director.  Retired Navy Admiral Dennis Blair was tapped for director of national intelligence.  And Assistant Attorney General for the Office of Legal Counsel will be Don Johnson. 

What?  The Miami Vice guy white cotton - that can‘t be right.  Oh, wait.  Not that Don Johnson, but this much more accomplished Dawn Johnsen.  D-A-W-N - the one who served under President Clinton in the Office of Legal Counsel.  Darn those homonyms. 

All right.  So what do these new nominees have in common?  None of them are associated with two of the big Bush administration constitutional scandals of the past eight years - torture and warrant-less wiretapping. 

In the March op ed of the “New York Times,” CIA director designate, Leon Panetta, wrote, quote, “Our forefathers prohibited cruel and unusual punishment because that was how tyrants and despots ruled in the 1700s.  They wanted an America that was better than that.  Torture is illegal, immoral, dangerous and counterproductive.” 

Illegal, immoral, dangerous and counterproductive - as opposed to the assessment of the current CIA Director Michael Hayden which was essentially, “When you say ‘torture,‘ what do you really mean by torture?” 

Now, for her part, Dawn Johnsen - she‘ll be heading up the Office of Legal Counsel, a definitively obscure position until President Bush OLC appointees like John Yoo started writing memos that said, “Torture is legal because we say it is legal.” 

The new OLC sheriff, Dawn Johnsen, wrote about Yoo‘s memo, quote, “Where is the outrage, the public outcry?  The shockingly flawed content of this memo, the deficient processes that led to its issuance, the horrific acts it encouraged all demand our outrage.  We must regain our ability to feel outrage whenever our government acts lawlessly,” end quote.  Wow, change.  Believe that. 

And then there is retired Navy Admiral Dennis Blair for DNI, Director of National Intelligence.  Now, ignoring for a moment the continuation of the recent trend toward putting the whole intelligence community under military control which personally kind of freaks me out as an anti-junta sort of person.  It still is - if you put that aside - it still is a big deal that Admiral Blair does not have links to President Bush‘s warrant-less wiretapping and torture policies unlike the guy Obama reportedly previously had in mind for the job first, CIA veteran John Brennan. 

So have President-elect Obama‘s executive decisions on this de facto day one finally delivered the change that his supporters were counting on?  Was today the clean break with the Bush administration on constitutional issues day? 

Joining us now is NBC News chief foreign affairs correspondent Andrea Mitchell.  Andrea, thank you so much for joining us tonight.  It‘s nice to see you.

ANDREA MITCHELL, NBC NEWS CHIEF FOREIGN AFFAIRS CORRESPONDENT:  You bet.  My pleasure.  Happy New Year.  Good to see you. 

MADDOW:  Thank you.  Were these choices today surprises? 

MITCHELL:  They were surprises only if you weren‘t reading his lips.  He said there was going to be change in exactly this area, and these are dramatic changes. 

Sure, Leon Panetta is being criticized by some, and we can get into that, for not being an experienced intelligence official.  And he may have problems with confirmation.  It is clear the incoming Obama folks did not check all the boxes, did not check with the key people that they need to check with in the Senate because the incoming chair of the Senate Intelligence Committee, Dianne Feinstein, is not pleased, neither is Jay Rockefeller, the outgoing chair, neither of them were checked with. 

And they are, in fact, supporting, I am told, Steve Kappes, who is the current deputy director of the CIA.  So there is a lot of roiling going on in the intelligence front.  In terms of the Justice Department nominees, these people have been praised by Larry Tribe, by Walter Dellinger, people from the Clinton era, and also, you know, liberal, strong, civil libertarians and esteemed judicial authorities that Walter Dellinger, a former deputy solicitor general. 

You have Elena Kagan, as solicitor general, the first woman and the highly regarded dean of the Harvard Law School.  So this is a very important step and a very big signal in terms of a change.  This is 180 degrees difference in terms of the office of legal counsel from John Yoo and David Addington from the Dick Cheney era. 

MADDOW:  On the Leon Panetta choice -

MITCHELL:  Sure.

MADDOW:  Are the objections from Rockefeller and Feinstein substantive about Leon Panetta, or are you sensing that they may be have more - their objections may have more to do with the fact that Rockefeller and Feinstein were not consulted? 

MADDOW:  No.  I think that these are substantive objective objections.  This is a different view of what the agency needs right now.  These are people who really are professionals because the role of being chair of the Senate Intelligence Committee very, very seriously. 

They feel that the agency has begun to turn around, that it‘s begun to become more professional and really adhere more to the rule of law, that morale has been a mess in the agency and that they think someone who is an intelligence officer needs to do the tough jobs that lie ahead. 

And to do that, to turn this ship around, you really need for the people, the rank and file members, particularly those in the D.O., the direct operations, the covert operations, you need somebody who has field experience.  That‘s one reason why they support Steve Kappes who‘s a former Moscow station chief who has a long track record in intelligence gathering, who has been in the field. 

The downside from the other perspective is that Steve Kappes was definitely in the line of authority during a lot of these controversial and many say illegal interrogation procedures - so he has that downside.

Jack Brennan - John Brennan, the former counter-terror  chief who had to take himself out of contention because of criticism, because he was too close to the former policies, certainly, let everyone believe that he had objected to the former policies and had no line authority for it and had a lot of support because he was a career guy with strong intelligence credentials. 

So it is the old argument over, “Do you want someone from the outside coming in, or do you want an intelligence executive who has been in the field?”  And critics point to Porter Goss as the last example of someone from the outside coming in, who was by all accounts, not a good and strong director of central intelligence. 

MADDOW:  Was there any reason to believe that the Panetta choice was made in a rush? 

MITCHELL:  No, actually.  And, well, I shouldn‘t say that because -

MADDOW:  I only ask because of having not gone to Rockefeller …

MITCHELL:  Sure. 

MADDOW:  … and Feinstein on this issue.  It seems like the sort of thing you would do in a matter of course if you are rolling the south in a deliberate way. 

MITCHELL:  Yes.  Let me correct the record on that, because, you know, there had been some discussion that - for instance, Chuck Hagel might have been at the CIA.  And from my reporting, he didn‘t want that job. 

You‘ve got Dennis Blair, a very tough customer who is going to be the head of national intelligence.  And so whoever is the head of the CIA, which is the operational wing and the analytical wing as well, although there has been merging and you know, some confusion between those two agencies.  But certainly, the head of national intelligence is the boss - the uber-boss.  And so, not everyone would want this job. 

Leon Panetta brings some very strong characteristics to the table.  He, as you noted, was a strong critic of the past policies.  He was a member of the Iraq study group.  He‘s got support from Lee Hamilton.  He is highly regarded.  He was chief of staff in the Clinton administration, but also was the OMB director.  He is a good manager and he‘s been a public policy expert. 

He‘s been at the Panetta institute which he and his wife Sylvia created in Monterey, California, and have been doing good works for all these years, for the eight years of the Bush administration. 

That said, they did not go to the Senate Intelligence folks who would have to confirm him.  And he is now being criticized as well by the vice chair of Senate Intelligence, Kit Bond, the ranking Republican.  So it is going to be an uphill climb for Panetta. 

And ironically, Panetta really apparently had an interest in the commerce secretary‘s job that had gone to Bill Richardson.  And now that is vacant.  So maybe there is a solution here. 

MADDOW:  So the smooth transition, whether or not it is going poorly, it is not as smooth as it was going before. 

MITCHELL:  These are some road bumps.

MADDOW:  Yes.

MITCHELL:  Exactly. 

MADDOW:  NBC chief foreign affairs correspondent, Andrea Mitchell. 

Thank you so much for your time tonight, Andrea. 

MITCHELL:  Thank you, Rachel. 

MADDOW:  Coming up next, National Guard soldiers from Indiana may have been exposed to toxic chemicals while guarding a water plant in Iraq that was operated by KBR, formerly of Halliburton fame, formerly of Dick Cheney fame. 

Senator Bayh will be here next to talk about how this happened, who‘s responsible and how these soldiers can get the treatment they never should have needed. 

(COMMERCIAL BREAK)

MADDOW:  While President-elect Obama is cleaning up his cabinet, we have learned that an outgoing Bush administration official has cleaned up his office bathroom to the tune of $235,000.  Sometimes “Lame Duck Watch” can be a dirty business, but somebody‘s got to do it. 

Remember the Interior Department, the one with the sex and drug parties that brought together government officials and the people they were supposed to be regulating, snorting meth off toaster ovens? 

Well, wait, there is more.  The “Washington Post” says Interior Secretary Dirk Kempthorne spent $235,000 taxpayer dollars renovating his fifth floor office bathroom just a few months ago.  The new bathroom has a shower, lavish wood paneling, monogrammed towels - I hope they are monogrammed with Ken Salazar‘s initials - and a built in refrigerator and freezer because there is nothing worse than warm Pepsi in the bathroom, leftover of best in the instant after a hot shower at work?  A fridge and freezer in the bathroom? 

I‘m telling you, there is going to be a Bush administration movie about the Interior Department and it is going to have to be R-rated. 

(COMMERCIAL BREAK)

MADDOW:  The recently signed U.S.-Iraq Status of Forces Agreement mandates the withdrawal of U.S. troops from Iraq by the end of 2011 and it establishes guidelines for troops‘ actions until then.  And then, there are the nearly 200,000 people working as private contractors in Iraq. 

Since 2004, American contractors have operated outside Iraqi legal jurisdiction because the U.S.-led coalition provisional authority wrote a rule that said contractors were immune from the Iraqi legal process.  That arrangement has been deeply unpopular with the Iraqi public and most of the world since September 2007 when guards from the Blackwater Company open fired and killed 17 Iraqis in Baghdad.  Five of the Blackwater employees were indicted on manslaughter charges last month. 

Now, another private contractor, KBR, the largest contractor in Iraq and a former subsidiary of Halliburton - they‘ve recently been under fire for their actions, more accurately for their inaction.  In 2003, shortly after the U.S. invasion of Iraq, 139 Indiana National Guardsmen went to Iraq to provide security for KBR contractors who were working at a water treatment plant in Basra. 

The workers and the soldiers were apparently exposed to an extremely carcinogenic powder called hexavalent chromium.  It‘s the chemical that was made infamous by the movie “Erin Brockovich.”  At least one Indiana National Guardsman has already died from lung cancer, another is reportedly dying and others are suffering from tumors and rashes. 

Sixteen Indiana National Guard soldiers have sued the Houston-based defense contractor saying the company knowingly allowed them to be exposed to this toxic chemical in Iraq.  The suit claims the site was contaminated for six months and crucially alleges that KBR knew it was contaminated but they concealed the danger from civilian workers and from the soldiers. 

As the human toll of this alleged negligence plays out, questions remain.  Who is ultimately going to be held liable here?  Who is going to pay for the advanced medical care for these troops?  And what‘s going to become of security contractors now that the Status of Forces Agreement puts them essentially under Iraqi jurisdiction. 

Joining us now is Indiana‘s Democratic Senator Evan Bayh.  Sen.  Bayh, thank you very much for coming on the show to talk about this tonight.  

SEN. EVAN BAYH (D-IN):  Rachel, it‘s good to be back.  

MADDOW:  Is it true that we are not even keeping track of the medical condition of troops exposed to chemicals like this in Iraq? 

BAYH:  Well, up until now we have not been.  Fortunately, the army has made progress in this particular case.  But the relevant elements here, Rachel, are in the contract that KBR signed.  They had a requirement, as soon as they went into that site, to do a risk assessment. 

And apparently, there were piles of this stuff, big orange piles.  It was equated with dust storms practically.  There was so much of it lying around.  And that report has either not been done in violation of their contract, or has not been shown to anybody, presumably because of what it contains.  That‘s really what we need to get our hands on so we could get to the bottom of what these troops were exposed to and make sure they get the kind of medical care they need going forward.  

MADDOW:  Obviously, there needs to be some sort of policy solution to avoid something like this happening in the future.  But more immediately, these Indiana National Guardsmen and women are facing some very serious medical concerns, as serious as you can get.  What are the immediate steps that are being taken right now to try to make sure that they are getting the care that they need and everybody who needs to get treated and looked at is getting treated and looked at? 

BAYH:  Well, this exposure finally is being included in their medical files.  And by the way, there may be guardsmen and women from Oregon on the site exposed as well.  What we need to get to the bottom of that.  But what we need to do going forward is very similar to what happened in Vietnam in the Agent Orange Case.  We need to create what is called a registry, Rachel, or the guardsmen and women who were exposed can be tested regularly for symptoms so they can get early treatment to cure, you know, cancer or other symptoms they might come down with. 

We have testimony that as many as 60 percent of the KBR personnel who were on site came down with severe nosebleeds and other indicia of exposure to this chemical.  So what needs to happen here is that the burden of proof should not be on the soldier.  Ordinarily, you‘ve got to prove that it‘s a service-related disability. 

But when you‘ve been exposed to a known carcinogen like this, the burden should be on the government.  We have a moral responsibility to give these men and women the very best care possible.  That‘s what needs to be done.  

MADDOW:  Do you believe that contracting and the processes around contracting have improved at all over the course of the war as we have relied so heavily on private contractors?  Could this happen again with the rules that we have in place now? 

BAYH:  Well, regrettably it might.  And we have a commission that‘s now been established.  I co-sponsored the bill and Claire McCaskill from Missouri authored the bill.  It‘s sort of the Truman Commission of this war.  And the sole purpose, Rachel, is to answer that question, to look at these contractors, to see how they behave, to make sure there is better oversight going forward. 

And I think you ask an important question in your lead-in.  You know, the government was at fault here at the beginning - no armored vehicles, no body armor, insufficient personnel, so they went out and had to hire a bunch of these contractors.  And we do face this occasional dilemma of the profit motive running head onto the responsibility to provide the best care and protection for our troops. 

We cannot allow that to happen.  That‘s what the commission should look into.  I‘m going to call for them to investigate this incident.  

MADDOW:  Senator Bayh, I would be remiss if I did not ask you about an issue of Senate business, not directly related to this, and that is the potential appointment of Leon Panetta as director of Central Intelligence.  Have you had any time to think about this potential appointment and do you have a reaction to it? 

BAYH:  Well, I have thought about it.  As you know, I‘m on the committee.  Look, I think Leon Panetta is an outstanding public servant and I intend to support his nomination. 

At the same time, I heard Andrea‘s reporting on Steve Kappes, and have a very high regard for him.  I‘ve been in some extremely sensitive meetings involving matters of life and death, and have been impressed by his competency. 

So perhaps the two of them - Leon is the chief, perhaps they can convince Mr. Kappes to stay on.  But I think, look, we have a president.  We have to respect his judgment.  When it‘s someone of Leon Panetta‘s stature, I personally would support that.  And we‘ve got to put issues of ego and those kinds of things aside and try to do what‘s right for our country.  So perhaps we can convince them both to remain there and do what‘s right for the country.  

MADDOW:  Indiana Democratic Senator Evan Bayh, thank you so much for your time tonight, Sir.  

BAYH:  Thank you, Rachel. 

MADDOW:  Coming up on “COUNTDOWN,” President Bush‘s farewell gift to Barack Obama - an even bigger mess in the Middle East. 

And next on this show, I get just enough pop culture from my friend, Kent Jones.  Jeb Bush, Bernie Madoff and Bjork, together again. 

(COMMERCIAL BREAK)

MADDOW:  Now, it‘s time for “Just Enough” with my friend, Kent Jones. 

Hello, Kent.  Happy New Year.

KENT JONES, POP CULTURIST:  Happy New Year to you, Rachel.  

Good news for the 12 or so remaining Americans that are sad to see the sun setting on the Bush presidential dynasty.  Yesterday on “Fox News Sunday,” President George H.W. Bush threw another strand of his DNA into the ring.  President Jeb Bush anyone? 

(BEGIN VIDEO CLIP)

GEORGE H.W. BUSH, FORMER UNITED STATES PRESIDENT:  I would like to see him run.  I would like to see him be president someday or maybe senator, whatever. 

UNIDENTIFIED MALE:  Really?

G.H.W. BUSH:  Yes, I would.  

(END VIDEO CLIP)

JONES:  Yes, quick question, why do you hate America?  What have we done? 

Finally, you know, this financial crisis is going to require some creative thinking to get everyone through it.  For instance, in Iceland, the latest entrepreneur partnering with a new venture capital fund is Bjork. 

MADDOW:  Whoa.

JONES:  Yes, her.  That Bjork.  Venture capitalist Bjork.  Bjork‘s new fund is designed to stimulate the economy by investing in Iceland‘s nature and culture.  So when you see this - you are to think liquidity.  Thanks, Rachel. 

MADDOW:  Thank you, Kent.   You know, I have a cousin in Newfoundland just obsessed with Bjork.

JONES:  Really?  

MADDOW:  No, no, no.  Not a family fact.

JONES:  Oh, she is fabulous, though.  It‘s not embarrassing. 

MADDOW:  Thank you for watching tonight.  We will see you here tomorrow night.  “COUNTDOWN” with Keith Olbermann starts right now.  Good night.

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

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