The Rachel Maddow Show, Transcript 03/01/10
HOST: Thank you for staying with us for this next hour.
White House Press Secretary Robert Gibbs announced today that this
Wednesday, the day after tomorrow, President Obama will make a detailed
proposal on how exactly to finish getting health reform done right now.
(BEGIN VIDEO CLIP)
ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: The president believes
strongly that we were—that he was elected to make progress on issues
that had confounded and vexed Congress and the political system for years.
Health care is being one of the bigger ones. I do believe the president
believes that an up or down vote is necessary.
(END VIDEO CLIP)
MADDOW: When they say up or down vote, they mean that Republicans
should stop filibustering health reform, let it pass or fail with an up or
down majority vote. And everybody knows that‘s not going to happen.
So, Democrats have a plan to get around that problem by getting the
last remaining tweaks to the bill passed using reconciliation rules. That
means those tweaks would pass with a simple majority in the Senate and a
bill would get to the president‘s desk.
This is it. It‘s going to happen. It took them a year, but they
have finally come around to recognizing that there are no Republican votes
for health reform, so they‘re going to pass health reform without
It‘s done. It‘s going to happen. Ambiguity over.
Everybody freak out!
(BEGIN VIDEO CLIP)
SEN. LAMAR ALEXANDER ®, TENNESSE: And it would be a political
kamikaze mission for the Democratic Party if they jam this through after
the American people have been saying, “Look, we‘re trying to tell you every
way we know how, in elections and surveys, and town hall meetings, we don‘t
want this bill.”
It would really be the end of the United States Senate as the
protector of minority rights.
(END VIDEO CLIP)
MADDOW: Senator Lamar Alexander talking about reconciliation as if
it‘s the end of the world, warning of the apocalypse that will be brought
down upon the Senate if it is used now.
It must be hard to argue with a straight face if you, yourself, have
voted to use reconciliation over and over and over again, like Lamar
Alexander has, like in 2003, when Lamar Alexander voted for the Bush tax
cuts under reconciliation, or the two times that Lamar Alexander voted for
reconciliation bills in 2005, or the time that Lamar Alexander did so in
2007 – the very same reconciliation rules which he now speaks so
The Google: one; Lamar Alexander: zero.
Joining Lamar Alexander in embarrassing himself on live television
on this subject is Republican senator and Sunday show-more-than-regular
John McCain. Senator McCain‘s big, awkward lie-down on the tracks to stop
health reform came when he proposed changing Senate rules so reconciliation
couldn‘t be used for anything involving entitlements. So, for example,
nothing that affected Medicare could pass as part of health reform.
(BEGIN VIDEO CLIP)
SEN. JOHN MCCAIN ®, ARIZONA: Entitlements should not be part of a
reconciliation process, i.e., 51 votes. It‘s too important.
(END VIDEO CLIP)
MADDOW: You know, today‘s John McCain should really talk to the guy
who used to call himself John McCain about that, because that other John
McCain consistently votes to change entitlements through reconciliation
In 2005, the Senate used reconciliation to pass the Deficit
Reduction Act by the slimmest of margins. The vice president at the time,
Dick Cheney, was needed as the tie-breaking 51st vote. That bill among
other things slashed spending for the entitlement known as Medicaid. Among
those voting yes to change this entitlement? Republican Senator John
In 1989, the Senate used reconciliation to pass the Omnibus Budget
Reconciliation Act of 1989. That legislation, among other things,
overhauled the doctor payment system for the entitlement known as Medicare.
Among those voting yes to change this entitlement? Republican Senator John
But now, Senator John McCain says, “Entitlements should not be part
of a reconciliation process.” “It‘s too important,” he says.
Senator McCain is now proposing to outlaw something that he has done
repeatedly. John McCain once again is taking a strong stance against his
Health reform is going to happen. Health reform is going to happen.
It has passed the House. It has passed the Senate. They are going to
bridge the gap between the two bills using reconciliation.
Republicans can do nothing about it. They lost this one. But in
the meantime, this is what they‘re flailing about, it looks like. They are
so desperate, for example, to stop Democrats from using reconciliation to
pass health reform that they‘ve taken to calling it the “nuclear option,” a
scary-sounding thing that has absolutely nothing to do with reconciliation.
In fact, the real nuclear option was a Republican threat back in
2005 to take away the filibuster all together. But since it sounds scary,
why not call reconciliation the nuclear option and just hope the media
repeats that weird, ham-handed lie for you?
(BEGIN VIDEO CLIP)
UNIDENTIFIED ANCHOR: Isn‘t it interesting, what used to be called
the nuclear option is now kind of a warm and fuzzy phrase called
UNIDENTIFIED FEMALE: That‘s right.
UNIDENTIFIED ANCHOR: Completely different image than—
UNIDENTIFIED FEMALE: Coming together.
UNIDENTIFIED ANCHOR: – the explosion of the nuclear option.
(END VIDEO CLIP)
MADDOW: No? No, no. Completely not what the nuclear option is.
Why would that FOX News anchor mistakenly believe that bogus Republican
talking point? Perhaps because he‘s been watching a lot of FOX News
(BEGIN VIDEO CLIPS)
STEVE DOOCY, FOX NEWS: Republican lawmakers fear that Democrats
will use the controversial nuclear option or reconciliation to pass health
care with just 51 votes.
BILL HEMMER, FOX NEWS: Reconciliation or the nuclear option
requires only 51 votes to pass the bill on the Senate side.
UNIDENTIFIED FEMALE: The GOP slamming the majority for threatening
to use the nuclear option. The Senate procedure called reconciliation.
GRETA VAN SUSTEREN, FOX NEWS: Some Democrats want to use
reconciliation known as the nuclear option to push through a health care
bill with 51 votes.
UNIDENTIFIED MALE: So, this may be the course, reconciliation, the
nuclear option, we shall see.
(END VIDEO CLIPS)
MADDOW: You know, they say that only—they only push an agenda.
They only sort of have opinions in their primetime hours, just those guys
at night. It‘s amazing.
Nuclear option is a totally different thing than reconciliation.
You guys could totally look it up. It is on the Internets and everything.
I checked today.
We have now entered into conservative desperation mode. Health
reform is going to happen. We know how it‘s going to happen. It‘s only a
matter of exactly when. Meanwhile, it‘s up to all of us to enjoy the
pageant of frenetic partisan desperation.
Joining us now is the chairman of the Democratic National Committee,
Tim Kaine. He‘s also the former governor of Virginia.
Mr. Chairman, thanks very much for joining us tonight.
FMR. GOV. TIM KAINE, CHAIRMAN, DEMOCRATIC NAT‘L CMTE: Hey, very
good to be with you, Rachel. And in Virginia we still believe in majority
rule. And I think most Americans kind of understand that.
MADDOW: Well, we learned today that President Obama is going to
announce his way forward on health reform, the day after tomorrow, on
Wednesday. I know you are very plugged into this process.
MADDOW: What can you tell us about the strategy moving forward?
KAINE: Well, I want to let the president make the announcement, but
you‘re right. All the options are being considered, and we are chuckling,
Rachel, just as you are, at the Republicans fighting so hard against the
notion of majority rule in the Senate.
The reconciliation rule is every bit as much as a rule of the Senate
as the filibuster rule is. They love the filibuster but they don‘t want to
allow the American public to have an up or down majority vote about whether
to reform insurance abuses.
And I think you‘ll hear the president lay out a strategy where we‘ve
debated this. We‘ve taken Republican ideas into account in the bill that‘s
passed the Senate. Now is the time to act and the American public wants to
see that Washington can act.
MADDOW: Republicans are starting to shift now to say that after
health reform passes, if they‘re not able to stop it, they will start
immediately to campaign to repeal health reform.
Any take on that?
KAINE: I hope they do, Rachel. I want them to campaign in favor of
insurance company abuses that kick people off policies when they get sick.
I want them to campaign and say they want to now re-impose more
prescription drug costs on seniors. I want them to campaign and say it‘s
wrong that parents are now able to keep their kids on their policies until
they‘re 27. They need to kick them all off the policies now.
They are fighting very hard against this because they‘re petrified
that it‘s going to pass. They know it‘s going to do good things for
Americans. They know that their record of obstruction trying to block
health reform is going to go very hard for them come November.
Your point at the top of the hour about reconciliation and how it‘s
been used—it‘s been used over and over again. This majority rule
principle is a rule of the Senate that has been used often by Republicans.
It‘s been used repeatedly to reform the health care system. It‘s been used
by Republicans to pass bills with much greater fiscal impact, the Bush tax
cuts, than this health care plan. They love to use it except when they—
when they see us wanting to use it.
But, again, majority rule is what Americans understand. This bill
is now passed both houses by a significant majority in the Senate—time
to fix it and make it happen.
MADDOW: The reason that reconciliation is on the table right now,
that these fixes between the two bills may pass by that process, is because
Republicans have pledged to filibuster not only this but everything—the
Senate is essentially 100 percent—
MADDOW: – filibustered body at this point. And it‘s possible—
MADDOW: – to work around that when you can using reconciliation.
Reconciliation is also a very awkward tool for doing all of the business of
the United States Senate, even though I believe it would work rather easily
for what they‘re trying to do with health reform.
What about the overall problem—
MADDOW: – of how many filibusters there are?
KAINE: Well, it is the case, Rachel, as you point out that the
filibuster rule is in place for a certain—you know, kind of issue, and
the Republicans are just running roughshod with it. They‘ve used it to
filibuster repeatedly noncontroversial matters.
And you know what they‘re trying to do when—if they can‘t succeed
on the filibuster, then they turn around and vote yes on the bill. They‘re
trying to block the American public from being able to get up or down votes
on critical matters. And when the up or down votes are called, then they
suddenly put themselves in the “yes” column for things like the jobs bill
that they passed last week.
What are—what are we going to do to keep them from being able to
carry this strategy out? I‘ve heard the Senate talk about a couple of
strategies. One of the simple ones is, if you want to filibuster, let‘s
really make you filibuster. Let‘s go back to the “Mr. Smith Goes to
Washington” days where, if you want to use that tool, you got to stand on
your feet and you got to look in the camera now and argue why it‘s good to
let insurance companies continue to kick people off policies for
preexisting conditions and others.
I think we‘ve probably changed the rule and not made people stand on
their feet and face the American public and explain what they‘re doing and
I hope the Senate might consider changing the filibuster rules at a minimum
to make people, you know, be straight forward about what they‘re up to.
MADDOW: I would be remiss in having you here if I didn‘t ask you
about a couple electoral issues that we have learned about today.
MADDOW: In Arkansas today, incumbent Democratic Senator Blanche
Lincoln learned that she is getting a primary challenge from the state‘s
Democratic lieutenant governor. We‘ve also learned that Harold Ford will
not be mounting a primary challenge against Kirsten Gillibrand in New York
Did the party at the national level weigh in on either of those
decisions, and will you?
KAINE: The answer is: we have not weighed in on either of the
decisions of Harold Ford or Lieutenant Governor Halter.
In Harold Ford‘s case, obviously, you know, a strong Democrat. I
think, with a great future in the Democratic Party. My sense is, you know,
he went around and surveyed and found that while people felt strongly about
him, Senator Gillibrand had a very, very dedicated group of supporters
within the state party. And, you know, I think he made the decision that
discretion was the better part of valor in that instance, but I think he‘s
going to continue to be a real strong voice within the Democratic Party.
I just learned within the last couple hours about the situation in
Arkansas and haven‘t really dug into that one very much. I do know that
today, at the White House, Robert Gibbs talked about the president‘s
support for Senator Lincoln, that she‘s worked closely with him. And, you
know, given that statement from the White House, I‘m sure we‘re going to be
taking the same tack. But that‘s one that I just learned about shortly
before I came on the show.
MADDOW: Prepare to hear from the left on Blanche Lincoln, Mr.
Chairman. They‘ve made their—they‘ve made their feelings about this one
known in a lot of fundraising already today. It‘s going to be a real hot
topic within the party.
KAINE: Yes, I‘m sure it will—I‘m sure it will, Rachel. I just -
you know, one of the things I know, having been a Democrat in Virginia,
is, you know, not every state is like every other and the definitions of
left, right, and center, you know, kind of depend on who your electorate
MADDOW: Chairman Tim Kaine of the Democratic National Committee—
thank you very much for your time tonight, sir. We really appreciate it.
KAINE: Glad to be with you. Thanks.
MADDOW: So, last summer was kind of fun, wasn‘t it? All those
seething town hall meetings with the shouting and the death panels and the
people with guns and the signs comparing President Obama to Hitler. Good
times. Those times are coming back apparently. Details on that in just a
And later, on “The Interview” tonight, I‘ll talk with Harry
Markopolos. He‘s the man who tried to blow the whistle on Bernie Madoff.
If the SEC had listened when Harry Markopolos had first approached them,
$43 billion could have been saved. That‘s billion with a “B.”
Please do stay with us.
MADDOW: The magnitude 8.8 earthquake that shook Chile on Saturday
was so powerful it may have changed the way the earth rotates on its axis
and made the length of a day here on earth shorter. Because the quake
shifted hundreds of miles of rock, it actually changed the distribution of
weight on the planet, which moves the axis around which the globe rotates.
NASA geophysicist Richard Gross has told “Bloomberg News” today that
according to his calculations, the earth‘s axis likely shifted by three
inches because of the quake and the length of the day should have gotten
shorter by 1.26 micro-seconds.
In Chile, the official death toll from the massive quake is now
above 720. That number is expected to rise. Almost 2 million people‘s
homes have been destroyed or rendered uninhabitable.
Secretary of State Hillary Clinton is on a Latin American trip right
now. She‘s due in Chile tomorrow. She will bring with her 20 satellite
phones and a technician to set them up.
USAID is also mobilizing a field hospital, communication, support,
and water purification systems at the request of the Chilean government.
If you would like to donate to relief efforts via your mobile phone,
here are a few options. You can text the word “Chile” to 25383 to donate
$10 to Habitat for Humanity, or you can send the word “Rebuild” to 50555 to
make a $10 donation to Operation USA, or you can text “Chile” to 20222 to
donate $10 to World Vision.
We will have more ways that you can help posted on our Web site at
MADDOW: Hey, remember all the shouting and the stalling and
screaming that was last August? When suddenly health reform was a
communist plot to kill your grandmother? When the idea of death panels was
a thing the president of the United States had to debunk?
Well, the summer of 2009 might be making a comeback, because the
highly-organized, well-funded groups responsible for much of the insanity
of last August are apparently becoming reenergized by the fact that health
reform really looks like it‘s going to pass now. “The Washington Post”
reporting on anti-health reform interest groups newly dispatching lobbyists
and launching new ad campaigns in a last ditch effort to fight reform.
Americans for Prosperity, for example, tells “The Post” it bought
$250,000 in TV ads last week and is planning more antireform ads and
rallies this month. The health insurance lobby group AHIP says it is
making a big effort to fight reform now and a conservative organization
called 60 Plus has announced a half million dollar ad campaign aimed at
getting 18 conservative House Democrats to vote against reform.
In case you don‘t remember who all these groups are from last time
around, here‘s a refresher. Let‘s start with Americans for Prosperity.
This group deserves lots of credit for the summer of the sweaty, screaming
town hall meetings. They‘re the people who brought you the anti-health
reform tour bus with the giant, bloody handprint painted on the side.
Their contribution to the political discourse includes this guy who
spoke at a rally they cosponsored in Pueblo, Colorado.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: If this new Obama cure program comes to
fruition, when you reach 65 and every five years thereafter, you‘re going
to have to have a counseling session with some federal airhead. Part of
this process is called end-of-life counseling and part of the end-of-life
counseling can be an end-of-life order.
What does that mean? End of life—another word for that is death.
Order. What‘s another word for that? A sentence.
Now, you folks review with me a little bit as I recall Stalin in the
1920s issued about 20 million end-of-life orders for his fellow Russians.
Pol Pot did it during the Vietnam War. He ended, issued about 2
million end-of-life orders.
Adolph Hitler issued 6 million end-of-life orders. He called his
program the Final Solution.
I kind of wonder what we‘re going to call ours.
(END VIDEO CLIP)
MADDOW: The president of the group at whose event that man was
speaking, Americans for Prosperity, was a guest on this show twice last
year. After his organization initially called that video a fraud and
denied that that speech was given at one of their events, here‘s what Tim
Phillips, the head of Americans for Prosperity, told me on this show about
that speech and that kind of rhetoric.
(BEGIN VIDEO CLIP)
MADDOW: Having speakers at your events saying that Obamacare is
like Pol Pot and the Holocaust.
TIM PHILLIPS, PRESIDENT, AMERICANS FOR PROSPERITY: I haven‘t said
MADDOW: Right. But your speakers have and—
PHILLIPS: A speaker who is at an event that was cosponsored by us.
PHILLIPS: We do not control the podium.
(END VIDEO CLIP)
MADDOW: We do not control the podium. Not “we denounce that kind
of rhetoric. That‘s a bad idea.” Not “it has no place at our events,” but
“we do not control the podium at the events that we sponsor.”
Tim Phillips also refused, during the course of his appearances on
this show, to disclose who his funders are, but he did use this show as a
platform from which to solicit more corporate funding for his organization.
(BEGIN VIDEO CLIP)
PHILLIPS: We‘re happy to take corporate money. So, if there are
more corporations watching tonight, feel free to give to us.
PHILLIPS: And if you‘re watching tonight and you want to give to us
and you‘re a corporation, we would love to have more corporate funding.
(END VIDEO CLIP)
MADDOW: More anonymous corporate money with which to fight against
health reform please and with which to say President Obama is Hitler.
Also a little refresher on America‘s Health Insurance Plans or AHIP,
this organization‘s motives are easy enough to identify. They are, of
course, the health insurance lobby. But as a reminder, their anti-reform
greatest hits include encouraging insurance industry employees to attend
town hall meetings to oppose reform back in August, even sending out anti-
public option august recess talking points for use at said town hall
Also in October of last year, AHIP threatened via a widely debunked
study to raise health insurance rates astronomically if health reform did
pass. And by widely debunked, I mean the firm that conducted the study
backed away from its own findings saying that AHIP only wanted it to
evaluate the parts of the health reform bill they didn‘t like.
And, of course, since health reform still hasn‘t passed, everybody‘s
premiums are totally holding steady or going down right now, right? Isn‘t
life awesome without health reform? Yes.
And then, of course, there is 60 Plus—the organization that bills
itself as the conservative alternative to the AARP. For its part, the AARP
exposed 60 Plus back in 2006 as a front group funded by the pharmaceutical
industry to stop state level health reforms that would cut into the drug
industry‘s bottom line. The primary objective of the 60 Plus literature
that I picked up at CPAC seems to proudly embrace the group‘s ties to
Americans for Prosperity—they, them, the bloody hand print on the bus
If the renewed efforts of these groups turn out to be anything like
their last big anti-reform push, if March is anything like August, we are
in for a long, nasty corporate-funded month. Except maybe this time, the
media will ask harder questions about who these folks are and who funds
them, right? Maybe? Please?
MADDOW: Who brought down Bernie Madoff? Bernie Madoff ran a fake
business, a fake investment scheme. He told people he was shrewdly playing
the market with their money, earning them a solid, never changing 12
percent annual rate of return. That meant you could double your money by
investing with Bernie in six years. Sounds great, right?
But in reality, Bernie Madoff wasn‘t trading or investing in
anything. He was just taking people‘s money and using it to pay off other
investors. It was a Ponzi scheme—a $65 billion Ponzi scheme that
unraveled in December, 2008, about a month after the presidential election.
Here‘s the thing though: Who brought Bernie Madoff down? Who
exposed him? Who caught him and got him arrested? No one did.
Madoff turned himself in when his Ponzi scheme collapsed on its own.
Ponzi schemes need a constant supply of new money to keep them going. When
the economy had a stroke at the end of Bush‘s second term, there wasn‘t
enough new money around to keep the scheme going.
Plus, some investors in the scheme found themselves in need of cash
when the economy turned. It was when they tried to take their money out of
Madoff‘s supposed funds that it all fell apart. The money wasn‘t there.
In retrospect, the warning signs are like red neon on a dark night.
Even as Bernie Madoff was known to be managing billions of dollars and
paying out 12 percent annually to all his investors, there were no signs
anywhere in the market that he was actually trading anything with anyone in
order to make anyone any money. If he were trading, what he said he was
trading, there weren‘t in existence enough of those things to explain where
all of his money and all of his market activity was going.
As the market went up and down and bubbled and crashed, Madoff‘s
returns stayed supernaturally steady. The fake returns he generated about
his supposed performance in the market showed him to be a batter with a
.960 batting average year after year after year, and nobody said this is
too good to be true. Nobody caught him – $65 billion, a total 100 percent
fraud that went on for decades and nobody caught him. He just blew up on
Inspires confidence, right? Why would anybody invest in the United
States if this is the kind of policing that we do against theft, fraud—
even the most basic con artists‘ schemes that have been around for
“The Interview” tonight is with a man who figured out Madoff‘s
scheme 10 years ago, who went to the SEC five separate times with the
evidence of what Mr. Madoff was doing, only to be ignored by the people who
were supposed to be watching all of our backs.
He is Harry Markopolos, the Madoff whistleblower. His book, “No One
Would Listen,” is out today. Mr. Markopolos, thanks very much for being
HARRY MARKOPOLOS, AUTHOR, “NO ONE WOULD LISTEN”: Good to be here.
MADDOW: Is that right that nobody got him? It just blew up of its own
MARKOPOLOS: Natural causes.
MADDOW: You were working in the financial industry in 2000. Your own firm
asked you essentially to try to compete with the returns that Bernie Madoff
was giving. When you looked at what he was doing, what was the tip-off to
you that something was wrong?
MARKOPOLOS: The chart that went up at a 45-degree angle in his performance
without variation. The markets go up and down. He only went up.
MADDOW: And so that was not exactly high-level math. It was just this is
too good to be true.
MARKOPOLOS: Impossible. Clearly impossible.
MADDOW: I can understand how individual investors, individual families
could get hoodwinked by the sorts of the false statements, the false
paperwork that he put out, the other things that Madoff did to make himself
But how did Wall Street firms get hooked? I mean, friends investing
billions of dollars with him and they never checked his math. They were
never suspicious the way you were.
MARKOPOLOS: I‘d say the Wall Street, the big firms on Wall Street knew
something was wrong and walked away. It was all the other firms around the
globe that rushed in especially the Europeans. The Europeans came in large
numbers. They were probably more Europeans in here, I suspect, than
MADDOW: So in terms of the people who did versus didn‘t get involved with
Madoff, obviously, somebody is offering a 12 percent return year after
year. You‘d think that everybody would put their money with them.
But you think that some firms did due diligence, realized that Madoff
was not legit and stayed away. So then didn‘t blow the whistle? They
didn‘t tell anybody?
MARKOPOLOS: When you live in a glass house, you don‘t throw stones. And
self-regulation doesn‘t work and I think this case proved it. Hundreds, if
not thousands, of people knew and no one reported it to the SEC except my
team and maybe two or three other whistleblowers. That was it.
MADDOW: Weren‘t those other firms though also competing with Madoff?
Wouldn‘t they have had a reason to try to get him out of the market?
MARKOPOLOS: I‘m sure all of them lost business to Madoff. I know all the
firms in Boston lost customers to Madoff because how can you compete
against somebody with perfect returns?
MADDOW: So - but still, there is that issue of the incentive. I mean, I
guess you don‘t really want to be seen as somebody who is a snitch if you
are also getting away with stuff that you don‘t want to get caught for.
But you would think that if he is controlling tens of billions of
dollars, you‘d think that a firm like Goldman Sachs or somebody else would
want him off the table.
MARKOPOLOS: I wanted him off the table. You would think that other firms
did. I guess I was the only one who thought like that.
MADDOW: It does seem damning that Madoff got audited every year. This
isn‘t one of the things I thought about before I read your book. And you
describe him as sort of shopping around for auditors, right?
MARKOPOLOS: That was his largest feeder fund, Fairfield Greenwich, that
used three different auditors from three different countries, three
different years. That‘s a glaring red flag. They controlled about $7.5
billion that they sent into the Madoff complex. Glaring, glaring red flag.
MADDOW: And so they‘re shopping around for auditors that are going to give
them a clean bill of health. But indeed, they find name brand auditors who
give them a clean bill of health just like Enron did, just like Tyco, just
like all of these firms that collapsed under fraud did.
MARKOPOLOS: The securities they were auditing never existed. All they had
to do was make a phone call and find out who did Madoff buy these
securities from on behalf of Fairfield Greenwich. No one ever made those
MADDOW: In terms of what we look to the financial industry and Wall Street
and the big accounting firms for, we expect that they‘re small C
conservative. They‘re doing due diligence. They‘re following the math.
They‘re making sure that everything checks out. Their incentive to not do
it is just because it‘s easier to get paid for not doing the work?
MARKOPOLOS: It seems like a lot of people got paid a lot of money and no
one did the proper work. No one asked any questions of Madoff. No one did
any due diligence questions on a normal checklist.
I don‘t know how he got away with it. And it wasn‘t only the
accounting firms. It was big banks. It was custodian banks. It was
third-party plan administrators who were clearing the trades and saying
that Madoff - sure, these trades are legit.
This is how we keep his performance. There were no trades though. So
what were the plan administrators doing? I still don‘t know.
MADDOW: Well, they were getting paid - as you document, they were getting
paid giant fees by Bernie. They were getting giant fees from Bernie Madoff
to keep shoveling money to him without asking questions.
MARKOPOLOS: Everybody got paid a lot of money. He paid over 90 percent of
the total fees in the scheme to the people that weren‘t asking questions of
those feeder funds.
MADDOW: Yes. And the people who were asking questions like you got
ignored. You sort of tried unsuccessfully to be the Madoff whistleblower
in time. What you‘ve ended up being is the SEC whistleblower, right?
I mean, you are exposing how badly we need good regulators on Wall
Street, what a joke it is to have self-regulation but also how lame our
current regulators are. How seriously do you feel like those concerns are
being taken now?
MARKOPOLOS: None. No one has been fired at any of the banking regulators
for ignoring the banking crisis before it was happening, before it
unfolded. The SEC? No one has been held accountable. No one has been
fired. People only get promoted at these agencies and that‘s the tragedy.
MADDOW: Are we doing anything any better now than we were when you were
being ignored by the SEC for eight years?
MARKOPOLOS: Yes. The SEC is turning itself around as quickly as they can.
I mean, it‘s reorganized itself. It‘s taking Ponzi schemes seriously.
They moved them up to the top of the priority list from the bottom.
They are going after Ponzi schemes aggressively. They are sending
people for training but they have the wrong staff. They have way too many
lawyers. They don‘t have enough people that understand finance.
MADDOW: You‘re a quantitative guy. You‘re a guy who is a math guy, a
numbers guy. Those folks are not generally involved in the regulatory
agencies now. Is that what you‘re saying?
MARKOPOLOS: But they need to be. They need to be brought onboard. They
need to be compensated correctly, and they need to be incentivized.
MADDOW: You are a full-time fraud investigator now?
MADDOW: It doesn‘t - one of the things that‘s interesting about your
personal story here is doing that doesn‘t work as a career unless there are
cops who you can turn in the robbers to. Right?
It‘s one thing to expose the fraud and put together the case but if
nobody responds once you bring it to the authorities‘ attention, you‘re not
getting anywhere as a fraud investigator.
Have you ever thought about, instead of doing what you‘re doing, going
to work for the government to show them how it‘s done?
MARKOPOLOS: I do indirectly. I do give my cases to the state attorney
generals who act on them. Jerry Brown has one of my cases. His pension
fund in California - tens of millions of his pensioners have been defrauded
by a bank, State Street, in a foreign currency fraud, and I turned that one
in. He is acting on it.
I‘m hoping other people will act similarly. Tens of billions in
pension assets are being stolen. I think the states do act. The federal
government, the SEC needs to wake up, smell the coffee.
MADDOW: The book will probably help at least if it does its job. Harry
Markopolos, thank you for everything you tried to do and for what you‘re
still trying to do. And thanks for making time to talk to us. I
MARKOPOLOS: Great being here. Thank you.
MADDOW: Good luck. Thank you. OK. What would you call a senator giving
a one finger salute to a reporter shortly after voting against extending
unemployment benefits? I would call it something like painfully apt
symbolism. You can decide for yourself. That story and the video, next.
Please stick around.
MADDOW: We have a super cool “Moment of Geek” for you tonight, everything
you‘ve ever wanted to know about Pluto, the planet. Ex-planet. Ex-planet.
Sorry. It‘s been a very rough transition for me. The man who kicked Pluto
out of the solar system, astrophysicist Dr. Neil deGrasse Tyson, will join
us in just a moment.
But first, a couple holy mackerel stories in today‘s news. As you
know, the United States Senate is where policy goes to die. It‘s like a
roach motel. Things go in but they never come out.
Republicans have made it a policy to filibuster absolutely everything
in the Senate. Miraculously, though, Senate Republicans decided to join
with Democrats to extend unemployment benefits.
But before hell even had a chance to freeze over, before a single
icicle formed, Sen. Jim Bunning decided that that was too reasonable. Sen.
Bunning put a one-man kibosh on the jobless aid bill, personally stopping
unemployment benefits to 400,000 people who would otherwise be getting
And there will be more the longer Bunning holds out. Bunning‘s action
also forced the furlough of 2,000 Department of Transportation workers. He
brought millions of dollars worth of highway and bridge projects to a
He cut Medicare reimbursements to doctors by more than 20 percent.
And he even threatened the TV signals of 500,000 people living in rural
areas who receive broadcast channels through a special government deal with
satellite TV companies.
And even though furloughed federal transportation workers and doctors
who treat senior citizens on Medicare and Americans who will lose their
local TV signals and their unemployment benefits have reasons to be peeved
with Sen. Bunning, it is Sen. Bunning who is angry.
He‘s angry about all the media attention he‘s getting for doing this.
And he‘s angry about his right to ride alone in a very special elevator.
(BEGIN VIDEO CLIP)
SEN. JIM BUNNING (R-KY): Excuse me. This is a senator-only elevator.
UNIDENTIFIED MALE: Can I come on the elevator?
BUNNING: No, you may not.
UNIDENTIFIED MALE: Can you tell us why you‘re blocking this vote?
BUNNING: I already did explain it.
UNIDENTIFIED MALE: Well, what is the issue? Are you concerned about the
people who are unemployed?
BUNNING: Excuse me. I‘ve got to go to the floor.
UNIDENTIFIED FEMALE: Senator, can you just explain to us why you‘re
holding this up? I‘m sure you have an explanation -
BUNNING: Excuse me.
UNIDENTIFIED MALE: OK. Are you concerned about those that are going to
lose their benefits?
(END VIDEO CLIP)
MADDOW: Later, when an ABC News producer tried again to talk with Sen.
Bunning, he flipped him the gesture involving a finger that is not the
thumb, not the forefinger, not the ring finger or the pinkie finger.
Sen. Bunning‘s gesture was returned today in a more metaphorical way
by Senate Majority Leader Harry Reid who is reportedly planning to get
around Sen. Bunning by reintroducing this measure in a way that Bunning
procedurally cannot derail. Stay tuned on that one.
Next up, one of the most conservative Democrats in the Senate,
Arkansas‘ Blanche Lincoln, is up for re-election this year. It‘s a
prospect which has led her to be even more ostentatiously conservative than
usual, recently. That‘s a tried and true conservadem strategy since
Democrats are conditioned to believe that their only competition is with
Republicans and they never have to worry about an angry base in their own
Blanche Lincoln took that assumption to the breaking point and beyond
in this past year when she crusaded against the public option in health
reform despite polls showing how much Arkansans liked it.
Well, after a lifetime of earning it, Blanche Lincoln now has a
Democratic primary challenger. As we discussed with Democratic Party
Chairman Tim Kaine at the top of the hour, Blanche Lincoln‘s the challenger
is Arkansas Lieutenant Governor Bill Halter.
Mr. Halter announced this morning that he would challenge Lincoln in
the Democratic primary. He will be running as the progressive alternative
to the senator as evidenced by his record and by a totally unscientific
skin-deep analysis of these two Democrats‘ Web sites.
They‘re like inverted red/blue versions of each other. Look at that.
I know that‘s a superficial analysis. But come on. Wow. Sen. Lincoln
does have a $5 million war chest but Lieutenant Governor Halter has a
Seriously, it has already appeared in his materials, and liberal
groups are already helping out with the money thing. As of about an hour
ago, Act Blue had raised more than $100,000 for Mr. Halter.
And “MoveOn.org” had raised about $430,000 for him. That‘s more than
80 percent of its stated fundraising goal for a Lieutenant Governor Halter
for the week. Lieutenant Governor Halter will be a guest on this show on
Wednesday and Sen. Lincoln is welcome on this show any time.
We have asked about a million times. She has never been interested in
being a guest thon program. Sen. Lincoln, we would love to have you.
Really. It‘s not a trap. Come on. Come on.
MADDOW: Love him or just like him very much, the man who officially kicked
Pluto out of the solar system will be right here next. He‘s Dr. Neil
deGrasse Tyson. Please stand by.
(BEGIN VIDEO CLIP)
DR. NEIL DEGRASSE TYSON, ASTROPHYSICIST: Pluto‘s really puny, right?
UNIDENTIFIED MALE: Yes.
TYSON: But so is Mercury.
UNIDENTIFIED MALE: No, Pluto is a lot punier.
TYSON: A lot punier?
UNIDENTIFIED MALE: 1/20th the mass of Mercury.
TYSON: Less than the mass of the moon.
UNIDENTIFIED MALE: Touchdown right there. OK.
(END VIDEO CLIP)
MADDOW: That‘s from Neil deGrasse Tyson‘s new PBS NOVA documentary, “The
Pluto Files.” Dr. Tyson is the guy who killed Pluto. That is, it was Dr.
Tyson and his team at the Hayden Planetarium in New York City who decided
10 years ago to not call Pluto a planet anymore and instead classify it as
part of a distant asteroid belt.
So instead of remembering the planets by memorizing, “My very
excellent mother just served us nine pizzas” - Mercury, Venus, Earth, Mars,
Jupiter, Saturn, Uranus, Neptune, Pluto - you instead have to memorize, “My
very excellent mother just served us nachos.” No more pizza. No more
For being the first astrophysicist to reclassify Pluto, Dr. Tyson got
hate mail from third graders who wanted to know what he had done with the
planet that they loved, and no one admits was the inspiration for the name
of Mickey‘s dog.
Turns out Americans are weirdly, intensely in love with Pluto. It‘s
sort of America‘s planet. It was the only planet discovered by an
American. That was Clyde Tombaugh 80 years ago. Mr. Tombaugh made his own
telescopes on the family farm.
In “The Pluto Files,” Dr. Tyson goes to a barber shop in Mr.
Tombaugh‘s hometown, Streator, Illinois, and he sees what the guy who
discovered Pluto means to that town today. Check this out.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: We‘re very proud of him. Very proud of him, what he
TYSON: And so - and you learned about him in high school? No, elementary
school. Third grade maybe? Because that‘s when most people first learn
about the planets, right? And then, so his name comes up. You learn he‘s
a local guy.
UNIDENTIFIED MALE: Yes. Streator boy makes good, so to speak. And if
that could do it great - that‘s astounding. From Streator.
TYSON: So you feel proud?
UNIDENTIFIED MALE: Yes.
TYSON: You feel some pride?
UNIDENTIFIED MALE: Oh, you bet. Always did. Always had something to
point to as far as, “Look over here, that guy - he discovered Pluto. He‘s
from our area.”
UNIDENTIFIED MALE: Walt Disney named a dog after him.
UNIDENTIFIED MALE: So how do you feel about Pluto, Dr. Tyson?
(END VIDEO CLIP)
MADDOW: Joining us now is the man who dared to move Pluto and then get a
straight razor shave in Streator, Illinois, Dr. Neil deGrasse Tyson. Thank
you so much for being here.
TYSON: I‘m happy to be here.
MADDOW: All right. I want to start with the basics. What‘s planet? Is
there an agreed-upon definition of what a planet is?
TYSON: at this moment there‘s a voted-upon definition that doesn‘t have
full agreement by the entire community. But a planet is big enough to be
round and strong enough, if you will, to have completely - almost
completely cleared its orbit of other debris that could change its mass
So, in other words, the big eight - well, there‘s the big four.
Jupiter, Saturn, Uranus and Neptune. And then, there‘s like littler four,
Mercury, Venus, Earth and Mars. And then, there‘s Pluto which is puny
compared with these eight.
TYSON: Puny, all right? So Pluto is mixed with a whole group of other icy
bodies in the outer solar system. The Kuiper belt of comets.
MADDOW: Comets, not asteroids?
TYSON: Comets. Yes, right. Kuiper belt of icy bodies, OK?
TYSON: It hasn‘t cleared that orbit. There‘s much more mass of other
stuff out there than Pluto itself. In all the other eight, they‘ve
basically cleared their orbits. So definition of planet. Have you cleared
your orbit? If it‘s a yes, you put a check. Are you big enough to be
round? You‘ve got eight planets.
MADDOW: Big enough to be round?
TYSON: If you‘re little, then if you‘re rocky, the rocks define what shape
you are. So you could be craggy. You could look like an Idaho potato.
But above a certain size - it‘s a beautiful fact of physics that above a
certain size, the gravity forces your physical dimensions to take the shape
of a sphere.
MADDOW: Also true with people. I‘m sorry. All right. But -
TYSON: Do you ask people if they‘re planets or not?
MADDOW: No, I don‘t. The thing about Pluto that is fascinating is people
do get upset about it.
TYSON: Americans primarily. Yes, they get intensely emotional.
MADDOW: But I didn‘t know before watching your documentary that Pluto was
discovered by an American. And so that doesn‘t explain why I had this
emotional feeling about it.
TYSON: Exactly. In my sort of casual statistics, about 10 percent of
Americans who felt strongly about Pluto knew that an American had
discovered it. So the source had to be some other force acting on these
MADDOW: Do you know what it is?
TYSON: Well, not initially. I mean, I had to - I scratched my head and I
looked around. I sniffed around and I said, wait a minute, there‘s this
dog we all know, Mickey‘s dog, that has the same tenure in the hearts and
minds of Americans.
Why? Because it was first sketched the same year coincidentally that
Pluto, the cosmic object, was discovered. So 80 years they‘ve been in the
hearts and minds of Americans.
And when do you first learn about the planets? First, second and
third grade. When do you first watch cartoons? First, second and third
grade. There it is. And I think that link stays with us even if only
subliminally throughout our entire lives.
MADDOW: I also think that Pluto is an underdog. Not related to the dog
part of it. But we think like, oh, it‘s the puny guy, like Americans.
We‘re like the underdog.
TYSON: Exactly. And so that‘s OK, too. You know, if there‘s someone not
favored to win a contest and then they win, you cheer them even harder and
you‘re rooting for them.
Yes. Pluto was certainly the underdog, the puniest of the planets.
But now, in its new zone, it‘s one of the largest of the icy bodies. I
think of it as the king of the comets. I think it‘s happier there. It‘s
MADDOW: That was the same construction used to make the nerd guy cool in
it “16 Candles.” He got to be the king of the nerds instead of the lowest
anyway, when you met with the family of the man who discovered Pluto,
were they mad at you?
TYSON: I was worried about them. This is the whole family. Tombaugh‘s
widow who is like 97 or almost 100. And his sons and nieces and nephews -
they all gathered on his home in New Mexico to greet me as I came. I was
kind of worried -
TYSON: Because as a New Yorker, I‘m ready for, “Hey, what did you do with
our -“ I was ready for some of that confrontational encounter. But they
were so nice. They were so nice. Again, as a New Yorker, I was like,
“This is suspiciously nice. They‘ve got something cooking in the back.”
No, but they were genuinely nice. And I think they appreciated there
was this attention given to Clyde Tombaugh. Forget Pluto. The fact is I
came to learn of him and to learn about him as an American hero. He was a
farm boy from Streator, Illinois.
You see some guys in the barbershop. Main Street has a mural of him
down Main Street. There‘s a stained glass window in a church in New Mexico
that has his life on it. And he came out of a farm.
And he was looking up while everyone said, you know, till the soils.
He built his own telescopes. He had a relationship with the universe that
ended up becoming realized as professional astronomer. That‘s an American
story and not enough people know it.
MADDOW: And that makes them, I bet, feel a lot better.
TYSON: I didn‘t do it just to make them nice with me.
TYSON: They were actually genuinely nice people. That‘s right.
MADDOW: Dr. Neil deGrasse Tyson, thank you so much. I really appreciate
your time and thank you for making this cool documentary about a cool
TYSON: I‘m happy. Yes, thanks for thinking about it.
MADDOW: Neil deGrasse Tyson is the director of the Hayden Planetarium.
He‘s an astrophysicist. I want you to know that “The Pluto Files” was
inspired by Dr. Tyson‘s book of the same title. It‘s going to air tomorrow
on PBS at 8:00 Eastern.
OK. Coming up on “COUNTDOWN,” Keith advances his special comment
about life panels and his experience with them. We will be right back.
Please stay with us.
MADDOW: Tomorrow is the Texas Republican primary for the governor‘s race
there. And apparently, nothing sways conservative Texas Republican primary
voters like parodies of Abba‘s “Dancing Queen.”
That was an attack ad run by Rick Perry against Sen. Kay Bailey
Hutchison. Sen. Hutchison might be doing better in the polls right now had
she pulled the trigger on her devastating response ad which, of course, is
set to the tune of “Gimme, Gimme, Gimme a Man After Midnight.”
That does it for us tonight. We will see you again tomorrow night.
Until then, you can E-mail us, email@example.com. “COUNTDOWN” starts right
now. Have a good night.
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