The Rachel Maddow Show, Transcript 05/12/09

Guests:
Lawrence Wilkerson, Andrew Exum, Eliot Spitzer, Kent Jones
Transcript:

RACHEL MADDOW, HOST:  All right.  Coming up with us over the next hour: My interview with Eliot Spitzer, who is quite famously no longer the governor of New York.  We will also have a follow up this hour on the “don‘t ask, don‘t tell” firestorm our show appears to have helped start, today making its way to the White House.  That is all coming up.

But we start with the man whose TV ubiquity has moved from interesting, weird fact about his post-official life to potential problem for his political party.  I speak, of course, of Richard Bruce Cheney.  It was sort of a joke a few weeks ago that Dick Cheney was everywhere—an odd course of action for a former vice president who was as famously taciturn as he was resistant to inquiries from the media while he was in office.

But now, the punch line just won‘t stop.  After only about a 53-hour break from his last TV appearance, Mr. Cheney took yet another turn before the cameras today: in the middle of the afternoon on the FOX News Channel.

(BEGIN VIDEO CLIP, FOX NEWS CHANNEL)

RICHARD CHENEY, FMR. U.S. VICE PRESIDENT:  Bottom line is: we successfully defended the nation for 7 ½ years against a follow-on attack to 9/11.  That was a remarkable achievement.  Nobody would have thought that was possible, but it was.  I believe it was possible because of the policies we had in place, which they are now dismantling.

(END VIDEO CLIP)

MADDOW:  And by the policies we had in place which they are now dismantling, of course, he is talking about enhanced—torture.  He can‘t stop himself.  He keeps talking about torture.

Torture works.  Torture keeps us safe.  We should keep torturing.  Not torturing makes us unsafe.

The issue here is not particularly what former Vice President Cheney is saying in each individual interview because he‘s essentially saying the same thing over and over again.  The issue is that he‘s now driving the news cycle.  He‘s everywhere.  This started right before he left office and what we all thought was a legacy-crafting series of exit interviews before he was never to be heard from again.

(BEGIN VIDEO CLIP)

CHENEY:  On the question of so-called torture, we don‘t do torture. 

We never have.  It‘s not something that this administration subscribes to. 

Did it produce the desired results?  I think it did.

I would absolutely do it again, Bob.  I think the loss of life, if there had been further mass casualty attacks against the United States over the last 7 ½ years fully justifies it.  Think of what would happen if there had been an attack and we hadn‘t taken any of these measures.

(END VIDEO CLIP)

MADDOW:  We thought that would be Dick Cheney‘s parting “torture works” shot, that that would be the last we heard of him until he came out with his inevitable torture works book or something.

But after inauguration day, the former vice president found himself able to hold back from speaking on television again for a grand total of only about 14 days.  Two weeks after Barack Obama took office, Cheney gave yet another interview—this time to Politico.com, where, again, he credited the Bush administration‘s torture program for keeping the country safe.

(BEGIN VIDEO CLIP)

CHENEY:  If it hadn‘t been for what we did—with respect to terrorist surveillance program or enhanced interrogation techniques for high-value detainees and the Patriot Act and so forth—then we would have been attacked again.

(END VIDEO CLIP)

MADDOW:  And that was the start of Dick Cheney‘s out-of-office, “torture works” tour, which he has been on relentlessly ever since.

(BEGIN VIDEO CLIP)

CHENEY:  I think those programs were absolutely essential to the success we enjoyed of being able to collect the intelligence that let us defeat all further attempts to launch attacks against the United States since 9/11.  Now, I think that‘s a great success story.

It worked.  It‘s been enormously valuable in terms of saving lives, preventing another mass casualty attack against the United States.

(END VIDEO CLIP)

MADDOW:  It worked.  Torture works.

After CNN and FOX, last week, Mr. Cheney called into a midday North Dakota radio show.  His message there will sound familiar to you by now.

(BEGIN AUDIO CLIP)

CHENEY:  What we did in the whole counter-terrorist area was extremely effective.  And I think Obama needs to be careful because he appears to want to cancel out some of those most important policies.  We were able to go nearly eight years without another major attack on the United States.

(END AUDIO CLIP)

MADDOW:  OK.  By this point, the Politico, FOX News, CNN, North Dakota lunch time radio talking points repetition was having the effect that you might expect it to have on the overall national news cycle.

(BEGIN VIDEO CLIP)

CHRIS MATTHEWS, MSNBC HOST:  Republicans would probably be happy to see Cheney return to his secure, undisclosed location.  But here he is talking about the virtues of torture.

UNIDENTIFIED FEMALE:  Former Vice President Dick Cheney has some choice words for the current administration when it comes to enhanced interrogation techniques.

WOLF BLITZER, CNN ANCHOR:  Dick Cheney answers President Obama on waterboarding.  Was there another way to get information out of terror suspects?

(END VIDEO CLIP)

MADDOW:  When you go on a media tour, it sometimes works to get the media talking about you.

This past Sunday, more Dick Cheney on torture.  He sat down with Bob Schieffer of CBS show, “Face the Nation.”

(BEGIN VIDEO CLIP)

CHENEY:  I think the charge that somehow there was something wrong done here or that this was torture in violation of U.S. statutes is just absolutely false.

(END VIDEO CLIP)

MADDOW:  That was this past Sunday.  It‘s absolutely false.  And the ensuing news cycle again, predictably, was: did you hear what Dick Cheney said?

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE:  In words of warning, former Vice President Dick Cheney says the country is more vulnerable to terror attacks under President Obama.

UNIDENTIFIED MALE:  Tonight, Dick Cheney on the attack—the former vice president engaging in an extraordinary public debate with the new White House which he accuses of endangering America.

(END VIDEO CLIP)

MADDOW:  In a political development that no one could have predicted while he was still vice president, Dick Cheney is now sort of the biggest A-list Republican talking head anywhere in the country.  And because the source of his sudden interest in talking to the media appears to be his desire to defend himself on the issue of torture, torture is what America is talking about.

Any message the Republican Party might wish to distribute about itself is being overshadowed by what their big kahuna wants to be talking about.  Any time another A-list or B-list Republican speaks about these days, the thing they are asked about is torture.

The Obama administration expressly didn‘t want to spend all of this time talking about torture, but thanks to Cheney‘s remarkable media tour, the issue of torture won‘t get off the agenda.  So, this was not the game plan for the either the Democratic White House or for congressional Republicans who probably can guess that spending all their time defending torture will not be their way back to the majority in 2010.

So, weirdly, we are in this remarkable situation in which if there do end up being prosecutions for torture or disbarments or impeachment or even a truth commission or even if we keep talking about it every single day, civil libertarians may have to thank Dick Cheney and his compulsion to keep defending himself in public.

Joining us is retired Army Colonel Lawrence Wilkerson.  He worked in the Bush White House as former chief-of-staff to Secretary of State Colin Powell.

Colonel Wilkerson, it is great to have you back on the show.  Thank you.

COL. LAWRENCE WILKERSON, RET., U.S. ARMY:  Thanks, Rachel.

MADDOW:  The last time you were on the show, you said you didn‘t know if there was enough political will in Washington to pursue accountability on the issue of torture.  By speaking out so forcefully and repeatedly on the issue, is Dick Cheney potentially helping to create that political will?

WILKERSON:  I think he may be—which is, of course, I think, counter to his purpose.  I was listening to your lead in.

Let me say two things right off the bat.  First, you notice that Dick Cheney always says 7 ½ years or almost eight years no terrorist attack and so forth.  That‘s because he has the honor of being—or the dishonor of being the man on whose watch 3,000 Americans died, more Americans died from a terrorist under Dick Cheney‘s leadership, if you will, than any other president in our history.

The second thing that I want to say is that the reason we have not had another attack in this country more than any other thing is over 200,000 Americans who have been fighting in Afghanistan and Iraq against al Qaeda and other associated enemies—and they present not only this skill and talent at doing what they need to do, they also present a target-rich environment for al Qaeda.  So we have had 200,000 Americans overseas presenting al Qaeda with very, very lucrative targets.  And therefore, why would they want to come here?  This is—this is idiocy of the first order that Dick Cheney is putting out.

MADDOW:  Given that he was so reluctant to talk to the press while he was vice president and he was sort of proudly disdainful of public opinion — which I always thought was sort of one of the more interesting things about him whether or not you think it‘s admirable.  What do you make of his decision just to be talking so much right now?  Is this an attempt to mount a public defense?  Is this about the fear of being prosecuted?

WILKERSON:  He‘s a fearful man, as I‘ve said before.  And that very well could be the case.  He looks like “Batman” without Bruce Wayne‘s principles or maybe more accurately, the Joker with a straight face.  I don‘t know why, though, people give him so much air time.

This is the man who, after all, said we know with absolutely certainty Saddam Hussein has weapons of mass destruction.  We know he has an active nuclear program.  We know he has contacts with al Qaeda.  This is the man who told more lies from a public pulpit than almost anyone else I know.

Why does the media give him so much air time?

MADDOW:  I would like to have him on the show because I would like to ask him the questions that, I think, a prosecutor should ask him, personally.  So, I would give him air time, I have to tell you, I would.  But he won‘t say yes to our interview request yet.

WILKERSON:  Oh, I‘d love to watch that show.

(LAUGHTER)

MADDOW:  So am I.  Maybe you could come here and help me out if that was going to happen.

Do you know anything about the—I guess the next thing that we are due to hear is the CIA inspector general report on those—the destruction of those interrogation videotapes.  Given that that‘s the next shoe we expect to drop, is there any reason to believe that Dick Cheney might be particularly worried about that next round of discussion and accusation, potential calls for accountability on torture?

WILKERSON:  I think, absolutely so because Dick Cheney was around Richard Nixon when Richard Nixon made the mistake of keeping his tapes and not destroying them.  And I have no problem whatsoever understanding and knowing in my own mind that those tapes were destroyed either with the permission—tacit or otherwise—of the vice president‘s office or by the direct order of the vice president‘s office, because those tapes would have been damning.

MADDOW:  Colonel Wilkerson, you are a Republican and I think that—and you are not a politician—but I think the political implications of Cheney being out there so publicly on this issue are pretty obvious.  Is there anybody in the Republican Party who might tell him to keep quiet or leave the stage or stop advancing his own agenda that he seems to be pursuing at the expense of the party?  Is there anybody who could tell him to keep quite, who he might listen to?

WILKERSON:  I would have expected that George H.W. Bush would have said something in private, certainly.  I don‘t know that former Vice President Cheney would listen at this point, though.

His attack on Colin Powell was something that stunned me.  I didn‘t think he would go that far.  He is destroying what‘s left of the Republican Party.  I think the latest poll show we‘re down to 21 percent of Americans identifying as Republicans.  I suspect that if Cheney continues, it will be in the low teens.

He is destroying the party.  There needs to be someone with some—as we say in the Army—some intestinal fortitude, some guts who steps forward and tells this man to go home and shut up.

MADDOW:  On that point of his recent comments attacking Colin Powell, he on CBS on Sunday he would rather have Rush Limbaugh in the Republican Party than Colin Powell.  I know you don‘t still work with General Powell.   But, beyond being shocked, do you think that there is any appropriate response?  Do you think he should be asked for an apology?

WILKERSON:  Two tours in Vietnam, 35-plus years service to his country.  Five deferments for Dick Cheney, never served a day in the military, said he had other priorities.  I don‘t even think there‘s a comparison.

MADDOW:  Colonel Lawrence Wilkerson, former chief-of-staff to Secretary of State Colin Powell—thank you so much for your time tonight, sir.

WILKERSON:  Thank you, Rachel.

MADDOW:  Throughout the banking meltdown this past year, the public official renowned above all other American public officials for battling corruption and excess on Wall Street was on the sidelines.  Tonight, he‘s here.  Stick around for my interview with former New York Governor Eliot Spitzer.

And coming up: For an administration that has stayed on message on just about every big policy topic, there is one big policy area where they are really, really not making any sense right now.  We‘ll talk about what that is—next.

But first, One More Thing about Dick Cheney‘s magical media tour.  Today, less than a week after he told a North Dakota radio host it would be a mistake for the GOP to moderate, Florida‘s popular and moderate Republican governor, Charlie Crist, officially announced that he is running for Senate in 2010.  This is the same Charlie Crist who took the Democrat “socialist” Party stimulus money from President Obama.  But, nonetheless, the National Republican Senatorial Committee abandoned its previous declaration of neutrality in this race and has gone ahead and endorsed Crist over a much more conservative former state legislature named Marco Rubio who has already declared to be in the race.

Let round 1,642 of the Republican war over the moderates begin.

(COMMERCIAL BREAK)

MADDOW:  Taliban fighters launched a coordinated attack on government buildings in eastern Afghanistan today, combining a suicide car bombing at the gate of the governor‘s office with nine more suicide bombers who stormed the city office building nearby.  They took hostages.  They engaged in a six-hour gun battle with security forces outside the building and then they blew themselves up.  The death toll at this point appears to be nine victims in addition to the 10 attackers.

And for the first time in three weeks, there has been—excuse me, for the third time in three weeks, there has been what appears to be a mass poisoning at a girls school in Afghanistan.  Today, at least 98 people from a girls school in northeastern Afghanistan were hospitalized after they say a strange odor filled the schoolyard as the girls were lining up to come inside.  Students and teachers became ill and several of them passed out.

Yesterday, another 61 girls and teachers were hospitalized in a neighboring province called Parwan after what authorities described a poison gas cloud there caused similar symptoms.  A similar event happened late last month at another girls schools also in Parwan province.

Now, no one has claimed responsibility for attacks at any of these girls schools, although Taliban militants in a different part of the country, in southern Afghanistan, have, in past, proudly claimed responsibility for assaulting schoolgirls and doing things like throwing acid in their faces.

In the midst of this tremendously bad news, American politics and policy toward Afghanistan has actually gotten a little bit weird in the past week.  Not even a week ago, President Obama stood alongside the presidents of Afghanistan and Pakistan as he made the case for continuing and even an escalated U.S. presence there.

(BEGIN VIDEO CLIP)

PRES. BARACK OBAMA, UNITED STATES:  Many people in the United States -

and many in partner countries that have sacrificed so much—have a simple question: What is our purpose in Afghanistan?  After so many years, they ask: Why do our men and women still fight and die there?  And they deserve a straightforward answer.

               

So let me be clear: Al Qaeda and its allies—the terrorists who planned and supported the 9/11 attacks—are in Pakistan and Afghanistan.

(END VIDEO CLIP)

MADDOW:  Or maybe they‘re not.  Just a couple of days after that announcement from President Obama, the president of Afghanistan and our top military commander for the whole region, General David Petraeus said in interviews that actually al Qaeda isn‘t in Afghanistan anymore.  It seems like kind of a big deal for our strategy.

Then the day after the Petraeus interview, another surprise: An announcement from Defense Secretary Gates that he had asked the top U.S.  commander in Afghanistan, General McKiernan, for his resignation.  That‘s the first outright dismissal of a top U.S. combat commander in wartime, I think, since Harry Truman fired Douglas MacArthur during in the Korean War.

But that‘s not all.  Even as we still have no real explanation for why McKiernan got so publicly axed in Afghanistan, today, the top civilian envoy working on the whole Afghanistan/Pakistan strategy, Richard Holbrooke, he testified before the Senator Foreign Relations Committee.  Wisconsin Senator Russ Feingold asked Holbrooke: Are you sure the troop buildup in Afghanistan won‘t be counterproductive?  That it won‘t make the whole Afghanistan/Pakistan situation more unstable?

Listen to what Holbrooke said in response.

(BEGIN VIDEO CLIP)

SEN. RUSS FEINGOLD, (D) WISCONSIN:  Are you sure that the troop buildup in Afghanistan will not be counterproductive vis-a-vis Pakistan?

AMB. RICHARD HOLBROOKE, SPECIAL REP. FOR AFGHANISTAN & PAKISTAN:  No. 

I‘m only sure that we are aware of the problem.

(END VIDEO CLIP)

MADDOW:  So, to recap, we‘ve fired our top commander in Afghanistan, al Qaeda isn‘t in Afghanistan anymore, and the administration isn‘t sure our extra troops going to Afghanistan won‘t be counterproductive.  None of this is comforting.

Joining us is Afghanistan war veteran, Andrew Exum.  He‘s a fellow at the Center for a New American Security.  He‘s author of the book, “This Man‘s Army: A Soldier Story from the Front Lines of the War on Terrorism.”

Mr. Exum, thanks for being back on the show.

ANDREW EXUM, AFGHANISTAN WAR VETERAN:  Sure thing.

MADDOW:  Andrew, you wrote today on your blog that the public firing of General McKiernan was ruthless and you said it tells you that, quote, “President Obama, Secretary Gates and General Petraeus are as serious as a heart attack about a shift in strategy in Afghanistan and Pakistan.”  A shift in strategy to what?

EXUM:  Well, I think, first off, when we talk about the strategy for Afghanistan and Pakistan, what we‘re really talking about is the white paper that the Obama administration released after an extensive review of the situation in both Afghanistan and Pakistan.  This came on the heels of another review that was conducted by U.S. Central Command.

And what I think that you saw over the past few days was the Obama administration as well as Secretary Gates and General Petraeus, putting the man in charge in Afghanistan that they feel sees eye-to-eye with, especially General Petraeus, of course, the problem set in Afghanistan.  It‘s not that General McKiernan was an incompetent commander or that he had some great fault, but he might not be the right person for this particular situation.

General McChrystal, on the other hand, has a close working relationship that he developed with General Petraeus in 2007 during the surge.  And so now, General Petraeus has two subordinate commanders—one in Iraq, on in Afghanistan—with whom he has close working relationships.  And I think that General McChrystal will know exactly what General Petraeus is trying to do with respect to the population-centric counter-insurgency.

MADDOW:  I think it‘s important to figure out the relationship between all the brass and all the various different source of authority here.  But I also wondered just about the overall experience of serving in Afghanistan right now.  I know you served under General McChrystal in both Iraq and Afghanistan.  Amid the inevitable turmoil that comes with an abrupt change of command like this, do you think that McChrystal is likely to be a welcome choice for the front line troops not just for the other generals?

EXUM:  Yes.  I think he is.  First off, he is tremendously well-respected within the special operations community and within the light infantry community.  Second off, he has a reputation, not unlike Petraeus, as being a first-class intellect, being really among the smartest generals, not just in this crop of general officers but in the nation‘s history.  So, him and Petraeus are really—you can‘t described them as one-offs but they‘re certainly two very rare birds in the United States military.

Perhaps only General Amos of the Marine Corps and General Chiarelli of the United States Army can be mentioned in the same breath as far intellectual gifts and ability to conceptualize the problems in Afghanistan and Iraq.

MADDOW:  Andrew, beyond just the military strategy here, Richard Holbrooke told the Senate today that he is not sure building up more troops in Afghanistan won‘t just make the whole region more unstable, pushing the Taliban over into Pakistan.  He says, you know, we‘re at least aware of the possibility.  Just—it‘s nice to hear that sort of honesty …

EXUM:  Yes.

MADDOW:  . but I wonder if you‘re more impressed by the honesty or scared by the implication there?

EXUM:  OK.  Well, if you‘re—if you‘re looking for honesty, I‘m getting ready to give you a little bit more.

MADDOW:  OK.

EXUM:  The first thing is, is that violence is going to be a really bad metric for Afghanistan and Pakistan over the next year.  If you‘re scared by violence, if you‘re scared by U.S. casualties and Afghan security force casualties, those casualties are likely to go up in the next year.

Here‘s what you should instead be looking at.  We should instead be looking at two things.  First off, a drop in Afghan civilian casualties, and then second off, a successful Afghan presidential election.  So, the unfortunate reality is that we are looking down the barrel of another very violent year in Afghanistan.

But in the same way in Iraq in 2007, what we were looking for was not a drop in U.S. or coalition casualties, but was instead a drop in Iraqi civilian casualties.  We are looking for the same thing in Afghanistan right now.

MADDOW:  Andrew Exum of Center for a New American Security, former Army Ranger platoon leader in both Iraq and Afghanistan, and proprietor of a blog I read every day but still can‘t pronounce .

EXUM:  Abu Muqawama.

MADDOW:  Say it again.

EXUM:  Abu Muqawama.

MADDOW:  Yes.

EXUM:  That‘s Arabic, sorry.

MADDOW:  Yes, I‘ll work on it.  I do read it everybody.

EXUM:  All right.  Thank you.

MADDOW:  Andrew, thanks a lot.

EXUM:  Sure thing.

MADDOW:  All right.  Stick around.  A little bit later, I will interview Eliot Spitzer right here.  So many questions like: How did we get into this financial mess?  Where do we go from here?  And also, where does he go from here?

Stay with us.

(COMMERCIAL BREAK)

MADDOW:  Coming up in just a moment: I will be joined by former New York Governor Eliot Spitzer, right here, himself, live.  Don‘t miss that.

And later on: Chief federation correspondent Kent Jones takes us beyond the final frontier.  Apparently, we are all living in “Star Trek” already.

But first, it‘s time for a couple of holy mackerel stories in today‘s news.  On our last show, we reported the allegation by Republican Congressman Pete Sessions of Texas that President Obama is intentionally trying to, quote, “diminish employment and diminish stock prices as part of a divide-and-conquer strategy to consolidate power.”  So, Congressman Pete Sessions says that President Obama is deliberately sabotaging the economy, taking the country down for some reason.

Today, that allegation, crazy as it sounds, started to catch on and it has metastasized on the influential Republican radio show hosted by Rush Limbaugh.  This is remarkable.  Check it out.

(BEGIN AUDIO CLIP)

RUSH LIMBAUGH, RADIO TALK SHOW HOST:  The objective is unemployment.  The objective is more food stamp benefits.  The objective is more unemployment benefits.  The objective is an expanding welfare state.  And the objective is to take the nation‘s wealth and return it to the nation‘s, quote, “rightful owners,” think reparations.  Think forced reparations here if you want to understand what actually is going on.

(END AUDIO CLIP)

MADDOW:  So now, not only is Barack Obama an economic saboteur, but his intention is to forcibly use America‘s wealth to pay reparations to the descendants of slaves?  Is that what we‘re talking about here?  To take from white America and give to black America?

Never mind that Obama has opposed reparations his entire political career, including when he ran against little Alan Keyes in 2004 at a time when Alan Keyes supported reparations. 

We contacted Princeton Professor Melissa Harris-Lacewell.  She‘s a friend of the show.  We wanted to get her response to the allegations from Limbaugh.  She is one of the nation‘s leading experts on race and U.S.  politics. 

Melissa told us this, quote, “The terms ‘welfare‘ and ‘food stamps‘ and ‘reparations‘ are all code words for undeserving black people. 

Limbaugh is attempting to use the politics of racial fear to appeal to the

lowest common denominator of racial anxiety in this country.  Clearly, Rush

is not saying anything that is even vaguely substantively true.  He is

simply screaming, ‘There‘s a black man in the White House.  Be afraid!‘” 

See, if Dick Cheney would agree to do an interview on this show, then I could ask him if after hearing that he still thinks the Republican Party would be better off with more Rush Limbaugh and less Colin Powell. 

All right.  Next up, off the mainstream news radar, but close to my heart - at least to my ulcer - is the issue of nukes.  “That smoking gun could be a mushroom cloud” thing actually stuck with me. 

One of the great sharp policy divides within the Obama administration is between President Obama and his well-respected Republican Defense Secretary Bob Gates over the issue of nukes.  Obama wants a world with no nuclear weapons.  Gates is not only - is not signed in on that idea, he is also in favor of us starting to building a whole class of new nuclear weapons.  Obama is against that idea.  Gates is for it. 

Guess who won?  The National Nuclear Security Administration‘s budget is now out and that budget provides this many dollars for the reliable replacement warhead program.  Zero.  Zippo.  Policy fight, settled. 

Also, finally, today a man whose name is Donald Trump made a grand spectacle of announcing that Miss California Carrie Prejean will not lose her pageant sash for posing for sort of explicit photographs nor for becoming an anti-gay marriage activist, and she won. 

Mr. Trump showed off his knack for the sound bite by pointing out at today‘s media-drenched event that there is no difference between Miss Prejean‘s position on gay rights and President Obama‘s position.  Touche. 

Also putting the heat on Obama‘s gay rights record today, Lt. Dan Choi who publicly announced on this show that he was gay.  Following that appearance, Lt. Choi was told he will be kicked out of the military. 

Lt. Choi has now sent an open letter to the White House and to every member of Congress saying, quote, “As an infantry officer, an Iraq combat veteran and a West Point graduate with a degree in Arabic, I refuse to lie to my commanders.  I refuse to lie to my peers.  I refuse to lie to my subordinates.  I demand honesty and courage from my soldiers.  They should demand the same from me.  As an infantry officer, I am not accustomed to begging, but I beg you today: Do not fire me.  My soldiers professionalism should not be rewarded by losing their leader.  I love my job.  I want to deploy and continue to serve with the unit I respect and admire.  I want to continue to serve our country because of everything it stands for.  Please do not wait to repeal ‘Don‘t Ask, Don‘t Tell.‘  Please do not fire me.” 

Lt. Choi and, well, everybody, eagerly awaits a response from the White House and from Congress. 

(COMMERCIAL BREAK)

MADDOW:  He was the governor of New York, and then one fast furious scandal later, he wasn‘t.  Fourteen months ago, Eliot Spitzer resigned his office after being identified as a client of an escort service.  It was the end or maybe the interruption - we will talk about that - of a career that had showed almost unparalleled promise in the Democratic Party and real success and accomplishment. 

As New York‘s crusading attorney general for eight years before he became governor, Spitzer changed the way that Wall Street does business.  In 2002, he went after Merrill Lynch.  Armed with internal E-mails, he proved that stock analysts not only promoted stocks they did not actually believe in, but they had fundamental conflicts of interest with their bank‘s other clients. 

Merrill Lynch agreed to pay a $100 million fine and to change the way that it paid stock analysts.  The case led to 10 other major firms, including Citigroup and Goldman Sachs and Morgan Stanley paying $1.4 billion to settle similar claims. 

Mr. Spitzer was also the first to pursue a little company you might have heard of named AIG four years before its collapse for using deceptive accounting practices to mislead investors and regulators.  Here is then Attorney General Eliot Spitzer in 2004. 

(BEGIN VIDEO CLIP)

ELIOT SPITZER, FORMER NEW YORK STATE ATTORNEY GENERAL:  Where have the folks in this industry been that nobody stood up and said, “We‘ve got a problem here?”  This is - and that‘s why when I announced this - this is disappointing.  Where is the ethical compass of this industry?  This investigation is broad and deep and it is disappointing for what it once again reveals about the craven disregard for ethics and the law in some of our largest corporations. 

(END VIDEO CLIP)

MADDOW:  That was in 2004, four years before Wall Street collapsed.  What would that crusader say today if her were in the middle of the economic and financial hurly-burly we now find ourselves in? 

Well, joining us is the former governor of New York, Eliot Spitzer.  Governor, thanks for coming on the show. 

SPITZER:  Rachel, thank you for being here. 

MADDOW:  You took on AIG back before it was cool.

SPITZER:  Yes.

SPITZER:  You prosecuted other Wall Street firms for other forms of fraud.  Is there a connection between the kinds of things you prosecuted as New York State attorney general and what led to the collapse? 

SPITZER:  Oh, absolutely.  Now, the particular mechanisms, the derivatives and the swaps that were underlying AIG‘s failure are different.  But the fundamental accounting fraud that we found at AIG, the lack of supervision, the desperate desire to essentially cook the books - and AIG paid over $1 billion as a financial penalty as well back to settle our case. 

People went to jail for the false reinsurance contract - Hank Greenberg.  This was established in federal court.  He was called by federal prosecutors.  He was an un-indicted co-conspirator.  All of this was integral to a company that didn‘t have the controls, the ethics or corporate compass to be at the center of what I call the center of the web of the U.S. financial system. 

Now, what is deeply problematic to me and I think to many people these days is that $1 trillion later, trillions of dollars later - the word billion sounds almost quaint these days in terms of bailing them out - we have spent trillions of dollars.  Not nearly enough is changing. 

We are rebuilding the same edifice.  We are re-establishing the primacy of the same companies.  We are still building in a too-big-to-fail structure so we as taxpayers will be guarantors of companies that when they get in trouble again, we will bail them out.  None of this is being confronted by the administration as they and we, through our tax dollars, resuscitate a broken system. 

MADDOW:  You have made the case that we don‘t necessarily need new Wall Street regulation, that we need more aggressive prosecution.  We need more aggressive regulation using what‘s already on the books. 

SPITZER:  Right. 

MADDOW:  Essentially, you‘re agreeing that the government needs a new attitude, needs to be more active, more confrontational, more combative toward Wall Street.  How do we get that?

SPITZER:  It‘s not necessarily more combative.  It needs to be more thoughtful.  And there is a difference between unnecessarily and sort of predictably combative and having the capacity to step back and say, “Wait a minute.  There‘s a problem here.” 

Tim Geithner said something very interesting during his confirmation hearings.  He said, “I have never been a regulator.”  And I said, “Wait a minute.  You were the president of the New York fed.  Of course, you were supposed to be a regulator.  You were the overseer of the banks.” 

Now, I have written some stuff and others have written some stuff about the structure of the New York fed.  The problem at the New York fed and the New York fed is the organization that has dispensed through loan guarantees, through straight cash intervention, trillions of dollars, with a T. 

He was chosen by the CEOs of the banks.  The New York fed is dominated by CEOs of the very banks that failed, who have received this huge sum of money.  They have not been willing to acknowledge the fundamental failure of the system over which they had jurisdiction.  He was supposed to be a regulator, but he didn‘t want to see it that way.  And that is an issue we‘ve got to come to grips with.

MADDOW:  Does it mean you need different people, or does that mean you need a different structure?  It sounds to me like that‘s - if it is an OK way to set it up that way, you are going to get an obvious outcome from that (UNINTELLIGIBLE). 

SPITZER:  No.  I would like to see a very serious inquiry into the structure of the fed and New York fed, not to politicize it.  The last thing you want is to politicize it.  But there are supposed to be public voices on the board of the New York fed. 

The fed is sort of an odd entity, a quasi- governmental, quasi-private entity, its board members chosen partly by the board of governors of the fed in Washington, partly by the banks that control the fed. 

The public - I‘m not going to try to strike too close to home here.  The public representative chosen by the banks, public - Jeff Immelt, the chairman of GE …

MADDOW:  I‘ve heard of him.

SPITZER:  (UNINTELLIGIBLE) the chairman of this company. 

MADDOW:  Yes.

SPITZER:  But wait a minute.  He is the public voice, the chairman of GE, whose the bonds are being guaranteed by the fed, saving that company huge sums of money.  Where is the real public voice to say, why are we guaranteeing these bonds at what cost to competition?  What is being demanded in return? 

The same - it comes back to Goldman Sachs.  I wrote a couple weeks to months (UNINTELLIGIBLE) when AIG was first bailed out, the first tranche of $70 billion, $12.9 billion went straight through to Goldman Sachs. 

MADDOW:  Right.

SPITZER:  Why?  Did Tim Geithner ask Goldman Sachs, “Are you, as the counter party, on these CDS and these swaps?  Do you need that money?  What will happen if you don‘t get it?”  Why did they get 100 cents on the dollar?  And it‘s not there is corruption in the sense of illegality and people taking money in their pockets.  What there is, is a mindset that is so insular and it group-think in the worst possible court. 

MADDOW:  And the incentives are all going the wrong direction. 

SPITZER:  Incentives are completely perverse.

MADDOW:  And it is Wall Street and Washington? 

SPITZER:  Right.

MADDOW:  The first TV interview that you did after your resignation was, not until this spring, was with Fareed Zakaria on CNN.  I want to ask you about something that you told him.  Here‘s a short clip from that interview.

(BEGIN VIDEO CLIP)

SPITZER:  There are many on Capitol Hill who are beating their chests so loudly you know it is just to cover up their neglect and failure over the last decade.  They sat there and watched and did nothing as they clearly should have known that we were building a system that was a house of cards.  And they enjoyed it and prospered from it, and there was a symbiotic relationship between them and Wall Street. 

(END VIDEO CLIP)

MADDOW:  Symbiotic relationship -

SPITZER:  I learned that in biology in eighth grade, I think.  I hope I got it right.

(CROSS TALK)

Symbiotic, parasitic and there‘s a third one somewhere.

MADDOW:  Politicians, you were saying, knew the financial system was a house of cards, but they did nothing about it because they were benefiting from it. 

SPITZER:  Right.

MADDOW:  Who were you talking about? 

SPITZER:  Let me put it this way.  We had a vote in the United States Senate last week - maybe this week - where the issue before United States Senate was whether judges in the bankruptcy context would permitted to what they call cram down reform mortgages so people wouldn‘t be thrown out of their houses. 

MADDOW:  Yes.

SPITZER:  Virtually, every thoughtful person has said this makes sense.  This is a good way to keep people in their homes, avoid foreclosures, stabilize the housing market.  The banks that have received the trillion dollars opposed it.  Twelve Democratic senators did not vote for it.  It lost.

Dick Durbin, who is in my mind, a hero, the one voice in the United States Senate who stood up and said, “What is going on?”  The White House didn‘t push back adequately. 

MADDOW:  Yes, no White House -

SPITZER:  This is an easy issue.  Now, so what is going on with our Democratic senators that they sit by passively, know this is going to go through.  They have not confronted the issue of too-big-to-fail.  They have not confronted the issue of where the trillion dollars has gone. 

You know, at a deeper level, everybody says we overleveraged our economy.  And we needed to de-leverage because we had a period asset - increasing asset valuation, low interest rates and we were borrowing ourselves to death. 

MADDOW:  Right.

SPITZER:  All true.  We haven‘t de-leveraged.  All we‘ve done is switch the obligation from the banks to the taxpayer - to us.

MADDOW:  To us.  Right.

SPITZER:  And so, we are bailing them out and we‘re not getting

anything back in terms of changed structure, changed responsibility.  There

hasn‘t been one bank CEO who has been told to leave, one senior executive

risk manager who has been said - to whom it has been said, “You failed” 

You know, people say we want to purport here, referring back to the 1930s when after the Depression - or during the Depression, after the great crash, people said, “We need to figure out what happened.”  The analogy isn‘t accurate.  We know what happened.  We just aren‘t willing to hold people accountable. 

MADDOW:  Yes.  If at the end of this process, we still have things that are too big to fail, we know this process will not work - yes.

SPITZER:  But nobody in Washington right now is seriously challenging that premise.  Krugman is, (UNINTELLIGIBLE) is, the president of the fed in Kansas City is.  Wonderful speeches, but nobody in Washington is waiting to say, “Wait a minute.  This notion of enormous banks is failing.  And that is what took us over the cliff.” 

MADDOW:  We will be back with former Governor Eliot Spitzer in just a moment.  It is great to have you here.

SPITZER:  Thank you.

(COMMERCIAL BREAK)

MADDOW:  Fourteen months ago today, Eliot Spitzer went from being the governor of the third most populous state in the country to being the first New York governor forced out of office by scandal since 1913. 

In our last segment, Gov. Spitzer spoke about what has happened since he resigned.  Now, he is back with us.  Gov. Spitzer, thank you so much.  

SPITZER:  Thank you.  

MADDOW:  Talking about all of this stuff about the bailout, financial crisis, what‘s happening on Wall Street, regulation, the powers appropriate to regulators and all these other things right now, I feel like you must regret resigning.  Do you? 

SPITZER:  No.  That is a different issue.  I regret deeply that I‘m not able to participate as I had as attorney general and had as governor trying to confront some very tough important issues that I care deeply about that I think obviously all of us care deeply about and that I have tried to address in those various offices.

But the decision to step aside was the right decision for my family, for me, and the state.  And that was my - the only question that I asked myself, what is the right for the state?  What is right for my family?  And so I did so.  

MADDOW:  You are writing for “Slate.com” now.  You‘ve been giving interviews.  You‘re talking to me. 

SPITZER:  Yes.

MADDOW:  It seems pretty clear you that want to have a public profile again.  It‘s obvious that you‘re still really engaged with these issues.  What do you want for your future, not immediately but over the next few years other than for people like me to stop asking you questions about why you resigned? 

SPITZER:  Well, I would like to participate, as I think any citizen

would to the extent he or she has a perspective and to the extent that I

spent eight years as the attorney general, looking into these issues,

trying to dig into them.  And I think I can lend thoughts to the debate or

conversation about how we go forward, how we can -

MADDOW:  As a columnist?

SPITZER:  As a columnist, as somebody who will - I dread the fact that maybe I‘ll be a journalist - I don‘t know - as somebody who used to fend them off and pushed them aside as best I could.  Who knows?  But being part of that conversation is what I would like do and to sort of galvanize a perspective that I think still hasn‘t yet been properly organized around the notion that, you know what?  Wall Street failed this nation.  Let‘s say it very simply.  Wall Street failed this nation. 

MADDOW:  And it therefore has to be changed.  

SPITZER:  It has to be - we need a new mindset.  And I‘m not sure we are getting there.  If I can contribute to that, so be it, and I will do my best.  

MADDOW:  In terms of your reentry to public life and what you have been through, what you admitted to doing, being a client of this escort service, was illegal.  You were never charged with a crime.  Was the threat of criminal prosecution a factor in your decision to resign, the threat of impeachment a factor? 

SPITZER:  No.  It was a question of what I wanted to do and had to do for my family.  And, you know, there are moments like that when you sit down and you become more reflective and probably as reflective as I should have been at other times - clearly, as I should have been at other times. 

And you prioritize what matters.  And sound very trite but you say, wait a minute.  Family is absolutely first.  My obligation to the state, I‘m not going to put the state through a lengthy process here.  You try to do what is right and you hope it is for the best. 

It is awful.  It is horrendous.  You try to learn from it.  I hope I have.  And you try to protect your family. 

MADDOW:  Do you think that prostitution should be legal? 

SPITZER:  No, I - look, these are not victimless crimes.  And I know there is that argument right now we‘re going through another context when it comes to marijuana and other areas where, sort of, that have been at the boundary of criminal conduct and from a prosecutorial perspective.  Perhaps I‘m not the right one to pass judgment on that certainly at this point in time.  

MADDOW:  Yes.  Most people don‘t understand what drives somebody to do something so risky and so self-destructive at that time.  Do you feel like you now understand what led you down that path?  

SPITZER:  I think you get a better take on it over time.  You certainly have more time to think about it - the loss, the pain that I have inflicted on my family, on colleagues, on voters who supported me, who were hoping that I would do certain things and take the state a certain direction is enormous.  And I‘ve apologized first, to my family, to colleagues, friends, and the state.  And I will do what I can to contribute in whatever small way I can. 

MADDOW:  Gov. Eliot Spitzer, former governor of New York.  It is great to have you here.  I‘m sure this isn‘t the easiest conversation to have in the world, but it‘s really invaluable to have your insight.  Thank you.  

SPITZER:  Thank you.  

MADDOW:  Coming up on “COUNTDOWN,” Keith‘s unveils his brand-new segment, the WTF moment, tonight featuring Miss California. 

Next on this show, my friend Kent Jones visits the final frontier.  And we have a cocktail moment cheers for a state lawmaker who hates the ACLU so much he has made them take his side.  I‘ll explain in a moment.

(COMMERCIAL BREAK)

MADDOW:  Our chief over-the-top science fiction obsessions correspondent, Kent Jones, is all over today‘s “Star Trek” news.  Aren‘t you, Kent? 

KENT JONES, POP CULTURIST:  Over-the-top, really? 

MADDOW:  I know.  

JONES:  The “Star Trek” movie is more than just a big hit.  It is a way of life.  Check it out. 

MADDOW:  All right.  

(BEGIN VIDEO CLIP)

JONES (voice-over):  Did you ever want to live in “Star Trek” land? 

Dude, we already do.  Come out trekkies, the nerds have won.  

BARACK OBAMA, UNITED STATES PRESIDENT:  I believe in the final frontier.  

JONES:  Look around.  “Star Trek” is everywhere.  Communicators -

UNIDENTIFIED ACTOR:  Stand by Mr. Spock.  

JONES:  Every time you text or check your E-mail, thank a Vulcan named Gene Rodenberry.  Tasers that stun?  Got them. 

UNIDENTIFIED MALE:  It hurts. 

JONES:  Hand-held scanners?  McCoy, report to the bridge.  

UNIDENTIFIED MALE:  I believe something to do with his cardiovascular system.  

JONES:  And that‘s just the beginning.  Scientists weaned on “Star Trek” are working on real-life versions of cloaking devices, deflector shields and warp drives which can zip us around the universe at speeds faster than light. 

Of course, I have trouble getting WiFi when it‘s foggy outside, so I‘m not holding my breath. 

LEONARD NIMOY, ACTOR (as Mr. Spock):  It would be illogical to kill without reason.

JONES:  Of course, not everyone wants to live in a “Star Trek” world. 

Live long and prosper?  Dude - 

(END VIDEO CLIP)

MADDOW:  Cloaking devices.  We must have cloaking devices. 

JONES:  Can‘t come soon enough.  

MADDOW:  Very good.  Thank you, Kent.  Cocktail moment for you.  

JONES:  Very good. 

MADDOW:  Colorado, where a state senator named Greg Brophy - he‘s a Republican.  He hates the ACLU.  

JONES:  Imagine -

MADDOW:  I know.  He hates ACLU so much he decided to get a vanity license plate for his car that reads “ACLUSUX” which - because the ACLU is hilarious, prompted a letter to the Sen. Brophy from the head of Colorado‘s ACLU saying, “If you apply for that license and are refused, please contact us.  We stand ready to represent you if you want to pursue your right to have that.”  

JONES:  Very nice.  

MADDOW:  God bless them.  Thanks for watching.  “COUNTDOWN” with Keith Olbermann starts right now. 

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

END   

Transcription Copyright 2009 CQ Transcriptions, LLC ALL RIGHTS  RESERVED.

No license is granted to the user of this material other than for research.

User may not reproduce or redistribute the material except for user‘s

personal or internal use and, in such case, only one copy may be printed,

nor shall user use any material for commercial purposes or in any fashion

that may infringe upon MSNBC and CQ Transcriptions, LLC‘s copyright or

other proprietary rights or interests in the material. This is not a legal

transcript for purposes of litigation.>