The Rachel Maddow Show, Transcript 06/01/10

Guests:
Chris Hayes
Transcript:

RACHEL MADDOW, HOST:  Good evening, Keith.  Thank you very much for that.
And thanks to you at home for staying with us for the next hour.  Geek Week here has given way to leak week, as B.P.‘s underwater volcano of oil continues unabated after the top kill maneuver failed over the weekend.
Tonight, B.P.‘s future, given this disaster, and the latest last resort to try to stanch the out-of-control flow of oil.
It is also election night in America, primaries in three states. 
We‘ll have those results in this next hour.
Plus, what we now know has been important about the primaries that have taken place so far.  There is one important number and we have it for you coming up this hour.
Plus, when a Democratic Senate candidate did it, Senator Orrin Hatch wanted to make it illegal.  Now that a Republican Senate candidate has been caught doing it, Orrin Hatch says: harumpf, (INAUDIBLE) totally different.  Harumpf!  I didn‘t mean it all.
All of that plus Eurovision 2010.  Oh, no.  Oh, God.  The humanity. 
Eurovision 2010 highlights in deep, deep low lights—all coming up.
But, first, if you are keeping score at home, today was the day we went from asking whether the Gulf of Mexico would survive the B.P. oil disaster to asking whether B.P. would survive the B.P. oil disaster.  Check out the top of Britain‘s ITN News broadcast tonight.
(BEGIN VIDEO CLIP, ITN NEWS)
TV ANCHOR:  B.P.‘s share price tumbles as the Gulf disaster takes its toll on the oil giant‘s financial future.
(END VIDEO CLIP)
MADDOW:  Today, B.P.‘s stock price in Britain cratered.  It was the biggest one-day dive for B.P. stock there in 18 years.
(BEGIN VIDEO CLIP)
REPORTER:  It‘s already the worst oil spill in U.S. history, but this disaster has now turned into a financial one that‘s threatening the very existence of the British oil giant.  If criminal charges are brought against B.P., the financial penalties could be enormous.  One reason why B.P.‘s share price tanked this morning, going down 15 percent in half an hour.
(END VIDEO CLIP)
MADDOW:  B.P., the company, ultimately lost 15 percent of its value in the London stock market today.  The news for B.P. here in the U.S., not much better—B.P. stock sank as soon as the market opened in the U.S. and it never recovered.  Their stock fell 15 percent here as well.
We are in day 43 of this disaster.  So, why is this dramatic financial repercussion happening to B.P. now?  Well, it‘s in part because over the weekend, B.P. announced that the top kill had failed.  Oil continues to gush out of B.P.‘s leaking well in the Gulf of Mexico, unabated.
Now that the top kill has been tried and failed, the company says it has some other tricks up its sleeve to stem the seemingly unending flow of oil.  Including another attempt at a containment dome, only they‘re now calling it “cut and cap.”  That effort is under way right now.
It should be noted that these new methods are no longer about actually stopping the flow of oil from the well.  They are rather about sucking up as much oil as possible from the well as it continues to leak.  B.P.  appears to be conceding that they can‘t really stop the leak.
The most likely scenario at this point is that the well will continue to gush until maybe August, when relief wells can hopefully reach the source of the leak.  We‘ll have more on that in a moment with NBC‘s Anne Thompson.
But this disaster has already an existential crisis for the Gulf of Mexico.  The U.S. government is now raising the prospect that this ought to be an existential crisis for the company known as B.P. as well—as in could this make B.P. disappear.
The tools that the U.S. government has its disposal to make a threat like, or for reals.  This is not a theoretical discussion.  As we speak, Democrats in Congress still trying to find a way to pass legislation to raise the liability cap for oil companies from $75 million to $10 billion.  It‘s an effort that‘s been blocked by Republicans in the Senate three times so far.
But if B.P. were to be found criminally liable for this spill, that cap wouldn‘t even apply anyway.  And on that front, the attorney general, Eric Holder, was dispatched to the Gulf coast today where he announced that the Justice Department has opened a criminal and civil investigation into the B.P. disaster.
(BEGIN VIDEO CLIP)
ERIC HOLDER, U.S. ATTORNEY GENERAL:  Our environmental laws are very clear and we have a responsibility to enforce them and we will do so.  We will prosecute to the fullest extent of the law anyone who has violated the law.  We will prosecute anyone who has violated the law.
(END VIDEO CLIP)
MADDOW:  As far as determining whether any crimes were committed in this disaster, a senior Justice Department official tells NBC‘s justice correspondent, Pete Williams, tonight, quote, “The simple fact that there‘s oil in the Gulf is evidence of a crime.”
There are all sorts of federal laws B.P. could be on the hook for here.  But there is one in particular that is worth keeping in mind as this disaster progresses.  It might be even worth right-clicking it and saving to your desktop to look at every day until this is all sorted out.  It‘s called the Clean Water Act.
The Clean Water Act was passed by Congress in 1972.  It has been amended a number of times since then.  Among other things, the Clean Water Act gives the Environmental Protection Agency the power to seek civil penalties for each and every barrel of oil that leaks into U.S. waters.  In this case, “The Reuters” news organization turned up what they call a, quote, “little known, seldom applied clause in the Clean Water Act.”
The EPA documents obtained by “Reuters,” the basic fine according to the Clean Water Act is $1,100 per barrel spilled.  But if a federal court finds that gross negligence was behind the spill, that fine could rise to $4,300 per barrel spilled – $4,300 per barrel.
Ready to do the math on the B.P. oil disaster?  Federal officials are now estimating that anywhere between 12,000 and 25,000 barrels of oil have been pouring into the Gulf of Mexico every day since the end of April.
If that rate continues until August when the relief wells are complete, fingers crossed, the total amount B.P. could be on the hook for just from the EPA, just for this one law, just for violating the Clean Water Act, could be as high as $10.7 billion.  That would be if B.P. got slapped with the maximum fine.  That would be $10.7 billion on top of all of the other cleanup costs, all of the economic injury claims from local businessmen, all of the liability to states for tourism lost and whatever criminal charges the Justice Department turns up.
And now you know why B.P. originally estimated that just 1,000 barrels were pouring into the Gulf every day.  I figure they later had to amend under duress up to 5,000 barrels a day.
During that time, B.P.‘s CEO, Tony Hayward, tried to downplay the impact of the spill, saying the spill was, quote, “relatively tiny compared with the very big ocean.”  He also said the entire environmental impact of the disaster would be, quote, “very, very modest.
After new revelations that it might actually be more like 12,000 to 25,000 barrels per day, B.P.‘s CEO now says there‘s, quote, “no evidence of those plumes of oil underneath the surface of the ocean.”  He says it‘s just what you can see on the surface.  Swear.
That might be possible.  Maybe it is.  But given the history of all the different ways B.P. has lied or been wrong about these things, all of them coincidentally in the direction of there being less oil in the water and therefore less financial liability for the company?  Coincidentally?  Their credibility on this is now as sunk as their stock price is.
Joining us now is Chris Hayes, Washington editor for “The Nation.”
Chris, thanks very much for joining us.  Good to see you.
CHRIS HAYES, THE NATION:  Good to see you, too, Rachel.
MADDOW:  It, of course, has always been in B.P.‘s P.R. interest to downplay the size of the spill.  But as we look at what sort of financial liability exists here, do we now have sort of a clearer motivation for the consistent low-balling estimates from the company?
HAYES:  Yes.  Clearly, you know everything that you just said in the intro about the per barrel fines that it is—that it is liable to pay under the Clean Water Act.  There‘s also the other fact of the royalties?  I mean, they owe—this is not settled yet—but they‘re probably going to owe royalties to the U.S. government on every barrel as well.
So, they could be paying both in terms of fines and actually the money that they owe the government for royalties on both those things for every single barrel that comes out of the ground.  Clearly, it‘s in their best interest to not—you know, to low-ball that figure.
MADDOW:  It appears to be up to the EPA to decide what sort of penalties to go for.  Is there any reason why the EPA wouldn‘t want to seek maximum penalties in this case?
HAYES:  Well, no.  I mean, on its face, of course not.  I mean, this is the worst thing that‘s probably ever happened in the Gulf in terms of environmental degradation.  It should be noted that these things play out over a very long amount of time.  And that‘s one of the big problems.
I mean, for the people that were affected by the Exxon Valdez, that was 20 years of litigation.  By the time they got payouts from the court—
I mean, a lot—for a lot of them, their lives have been ruined.  It‘d been two decades.
And in this case, you‘re going to have a possibility, it‘s the coming from a federal agency which is the EPA, it‘s going to have to hand that off to some other administration either in two or six years from now.  That administration might choose not to pursue the maximum amount of fines.  So, nothing is guaranteed about what they‘ll end up having to pay.
MADDOW:  It‘s striking to see—obviously, the whole country so frustrated about the impotence here, not being able to get done what needs to get done.  And it‘s striking to see the threat of criminal charges and specter of all of these other intense financial penalties to be paid by the company while the leak is still leaking, while the disaster is still undergoing.
Is this strategically an effort to make B.P. do more?  Or is this an effort, doing this right now is to just make us feel better about the power of government?
HAYES:  Well, that‘s a really interesting question.  I mean, look, it seems that there is at one level a kind of unsolved engineering problem, right?  And then you see one of the things around this, when the president speaks about it—God knows I‘m not an engineer.  Everyone is trying to kind talk and calls engineers and figure out what this unsolved engineering problem is, and at the same time, there‘s this accountability issue, right?
And the accountability issue what you‘re speaking to, I think there is a real sense of growing frustration at B.P. and, generally, that we‘ve lived through this kind of accountability-free era.  And whether it‘s politically motivated or not, it seems to me the sort of staple of justice, if people are held accountable for wrongdoing, particularly when wrongdoing is done on the scale that we‘re talking about here.
MADDOW:  In terms of B.P.‘s liability and sort of what blood can be
wrung from this stone—obviously, B.P. is a massively profitable company


HAYES:  Yes.
MADDOW:  – as are all the major oil companies.  Is there—is this an existential crisis for B.P.?  Could it be?  Robert Reich is floating the idea of B.P. being put into temporary receivership.
HAYES:  Yes.
MADDOW:  Obviously, the prospect of these multibillion dollar fines on top of all the cost, a significant financial issue for the company—could this be the end of B.P.?
HAYES:  Sure.  I mean, I think the short answer to that is yes.  Look at Arthur Andersen, right?  I mean, Arthur Andersen was one of the “Big Five.”  It was one of the most famous accounting firms in the nation and it winked out of existence because overnight, it became clear that its liabilities in terms of gross negligence it had committed meant that it was going to have to file.
And I talked to someone on Wall Street today who said, “Oh, my God,
they might have to file.”  I mean, they—the $10 billion you were talking
doesn‘t count just simple tort common law claims.  I mean, every shrimper -
everyone who has an injury that can plausibly be connected to what they did has a tort case against B.P. plausibly and that doesn‘t even factor into federal law of liability cap.  So, there‘s a whole universe of punitive damages that could be weighing down over and above all the restoration costs the EPA finds.

I mean, when you start to calculate what this could look like from the balance sheet, you see that equity holders are running for the exits.  And there‘s—and it‘s not reasonable.
MADDOW:  Chris Hayes, Washington editor for “The Nation” magazine—thank you very much for your time tonight, Chris.
HAYES:  Thanks, Rachel.
MADDOW:  So, meanwhile, B.P. is just no longer working on the whole “stop the oil coming out of the pipe” project.
(BEGIN VIDEO CLIP)
BOB DUDLEY, B.P. MANAGING DIRECTOR:  After three full days of attempting top kill, we have been unable to overcome the flow from the well.  So, we now believe it‘s time to move on to the next of our options.
(END VIDEO CLIP)
MADDOW:  And the next of our options don‘t include stopping the oil flow any time before August at the earliest.  They‘re just hoping now to contain the oil.  What could possibly go wrong?
And later, election night in three states—those results coming up.
Plus, my buddy Ed Schultz will be here live in studio.  Please do stick around.
(COMMERCIAL BREAK)
MADDOW:  When the top kill procedure to stop the B.P. oil disaster from getting worse was first announced, B.P. officials gave it a 60 percent to 70 percent chance for success.  Unfortunately, it was clear by Saturday night that the top kill procedure was just the latest failure in a long line of failed attempts to plug the leak at the Deepwater Horizon rig.
(BEGIN VIDEO CLIP)
DUDLEY:  After three full days of attempting top kill, we have been unable to overcome the flow from the well.  So, we now believe it‘s time to move on to the next of our options.
(END VIDEO CLIP)
MADDOW:  The next of our options include a second shot at that whole containment dome thing.  They‘re now calling it “cut and cap.”  Cutting the 21-inch kinked riser pipe with a saw that is studded with industrial diamonds.  Great saw, unfortunate image for B.P.
After the cut happens, B.P. is attempting to cap the pipe with a containment dome and to divert the oil to a ship on the surface.
Now, of course, if they are able to cut the pipe but not cap it, they may have widened the opening of the pipe and potentially increase the volume of oil spilling into the Gulf by up to 20 percent.  Problem not solved.
Let‘s just say this cut-and-cap thing they are trying right now works.  The cutting, the capping, all goes according to plan.  A manmade disaster addressed with manmade techniques.  Then nature comes along.
Today is the official start of hurricane season.  If a big storm were to hit in the region where a ship was receiving diverted oil from the containment dome, that ship would have to unhook itself from the containment dome and get out of the storm‘s way.  The dome would hopefully stay put during the storm.  But at that point, we‘d be back to the oil just leaking into the sea freely again.
And that brings us back to square one: stopping the leak, not just diverting the oil.
From the start, B.P. and the government have told us that the light at the end of the tunnel, the very last fail-proof rescue would be these relief wells that B.P. started drilling in early May.  Yes, the wells would take about three months to finish.  Yes, the process has been described as hitting a dinner plate from two miles away.  Yes, oil would continue to spill into the Gulf until August.  They have to dig deeper than the well itself and then intercept the oil flow beneath the seabed.
But—but at the very least, we know those relief wells will work, right?  All hail the relief wells.
(BEGIN VIDEO CLIPS)
KEN SALAZAR, SECRETARY OF THE INTERIOR:  You are looking at potentially 90 days before you ultimately get to what is the ultimate solution here and that‘s a relief well.
ADM. THAD ALLEN, U.S. COAST GUARD:  The ultimate solution is to drill a relief well.
DUDLEY:  The backstop and always the backstop will be the relief well in August.
HAYWARD:  There‘s no doubt the ultimate solution is the relief well.
CAROL BROWNER, WHITE HOUSE ENERGY ADVISOR:  We always knew that the relief well is the permanent way to close this.
(END VIDEO CLIPS)
MADDOW:  The ultimate solution, the backstop, the permanent way to stop this.
After the 1979 Ixtoc oil spill, the same relief well techniques were employed as the ones B.P. is using today, because oil disaster response technology hasn‘t advanced much in 30 years.  The Ixtoc relief well solution took nine months.
Last year‘s Montara spill off the northwest coast of Australia proved similarly vexing.  The first four attempts at a relief well there failed.  It was only attempt five that succeeded with a relief well there.  One of the attempts there started a fire that destroyed one of the drilling rigs on site.
Today, the president-elect of the American Association of Petroleum Geologists said for the B.P. oil disaster, it is, quote, “almost a certainty that the initial attempt at the relief well will be a failure.”  To intercept the damaged well, he said, quote, “What you‘re doing is trying to intersect a well bore that is probably roughly a foot across with another well that is about a foot across.  It would be like winning the lottery to get it on the first shot.”
So, when you hear relief wells described as the ultimate solution to the B.P. disaster, the word “ultimate” really just means it‘s the last thing we know how to do.  It‘s our ultimate try at stopping this.  It is not like it‘s easy or a sure bet.  If it fails—if nothing works, then presumably we wait.  We wait for the bore hole to collapse, or for the well to finish itself off by gushing all its oil to the point where the pressure drops.
If it sounds like even the ultimate solution isn‘t really a surefire solution, you are starting to get the idea of how disastrously unsafe underwater drilling is now and always has been.
Joining us now is NBC News chief environmental affairs correspondent, Anne Thompson, who joins us again from southern Louisiana.
Anne, thank you very much for being back on the program.
ANNE THOMPSON, NBC NEWS CHIEF ENVIRONMENTAL AFFAIRS CORRESPONDENT: 
Hi, Rachel.
MADDOW:  So, relief wells have been described to us as the sure bet here.  Does that understate how hard it is to get the relief well idea right?
THOMPSON:  Well, I don‘t think anybody—anybody who knows anything about relief wells has—knows this is very, very difficult to do.  But it‘s the one thing they know that does work.
And you have to remember that with top kill and with that giant four-story containment dome, and with trying to activate the blowout preventer at the very beginning of this, all the different techniques that they have tried, and now, even with the slice and cap technique—these have been real-life experiments that we are watching while the relief well is drilled.  That is the one thing, as I said, they know that works because, essentially, it is a bottom kill.
Remember, with the top kill, how they were throwing mud into the top of the well and in an effort to hold the pressure of the oil back and then they were going to cement it.  With the relief well, what they do is they drill down to the bottom of the well and it is there that they put in the heavy drilling mud and then they follow with cement.  And that is a technique that they know that works.
The problem, as you said, is, you know, one person has compared it to finding a needle in a haystack.  You are drilling in this case, you‘re going to go more than three miles down and you are trying to find this well that‘s about the size of a dinner plate.  And it‘s very difficult to do.  The only advantage they have in doing this is that they know the geology from the first well that they drilled.
The other thing that has happened, Rachel, is because it is so difficult, the Obama administration ordered B.P. not just to start one relief well, but to drill a second one as well, in case they don‘t make the connection with the first relief well.
MADDOW:  And speaking on June 1st, at the start of hurricane season—in the event of a hurricane in this region, what happens if, say, the relief well is still being drilled?  What happens if the slice-and-cap containment dome is still hooked to a ship out in the Gulf sucking up oil and a hurricane comes along?
THOMPSON:  They have to move people off the rigs.  I mean, that is just absolute protocol here in the Gulf for the oil industry.  They have to keep their people safe.  And so, it would slow the whole process down and delay it even further.
Now the good news about the first relief well is that B.P. says it‘s about 10 days ahead of schedule.  It is—it is—they‘ve done all the vertical drilling, and now, they are at the point where they‘re doing the horizontal drilling.  And it is about 12,000 feet down and it has to go 18,000 feet down.  So, it‘s 10 days ahead of schedule, which is good—because if there is a tropical depression, if there is even a hint of a tropical storm or hurricane, all work will have to stop because they‘ll have to bring the people to shore until the storm passes.
MADDOW:  Anne, we‘re about to head back down to the Gulf region just because we feel like we want to get closer to this story again.  We‘ve already taken one trip down there.  Having spent these last few weeks there reporting, do you feel the people in the region share sort of stated optimism from the powers that be about the relief well?  Is there any optimism left?
THOMPSON:  No.  I don‘t think there‘s any optimism left here, Rachel.  People here—they know the relief well is the tried and true technique here, in large part many of these people, not only do they make their lives from the fishing industry here, but many of them have worked on rigs in the course of their lives.
But I think when you come down here, what you will find are people who are really resigned to the fact that this is going to be a very long crisis and even once they get that well plugged, when that day comes, it is still going to be months and years before this region fully recovers from what‘s happened.
MADDOW:  NBC News chief environmental affairs correspondent, Anne Thompson—as always, Anne, thank you very much.
THOMPSON:  Take care, Rachel.
MADDOW:  Thanks.
So, my friend Ed Schultz is here in studio with us next.  Plus, we‘ve got some primary results, and Orrin Hatch getting caught doing something very, very, very, very, very, very, very partisan—and I mean that in a bad way this time.  That‘s all to come.
(COMMERCIAL BREAK)
(MUSIC)
MADDOW:  That‘s my favorite song.  Decision 2010 is here again!  Five more months of the animation and the song—everything.
Tonight is primary night in Alabama and Mississippi and in the great state of New Mexico.  In Alabama, Democratic Congressman Arthur Davis is vying to be Alabama‘s first African-American governor.  At the moment with a whopping 3 percent of precincts reporting, Agricultural Commissioner Ron Sparks has the lead in the Democratic gubernatorial primary over Arthur Davis.  But, again, 3 percent—don‘t jump to any conclusions.
Over on the republican side in the Alabama governor‘s race, there are seven people running for the republican gubernatorial nomination.  Alabama is a runoff state and the top two contenders on that side will likely face off in the July 13th runoff there.  Speaking of run offs, Congressman Parker Griffith who was elected a democrat in 2008 but switched parties in December to become a republican, he is facing two opponents in Alabama‘s fifth district in the republican primary there.  Unless he can get 50 percent plus one of the vote, Mr. Griffith will have to keep it up for the July 13th runoff elections which could be very difficult for him. 
Over in Mississippi, which is also a runoff state, the most interesting race is the republican battle for the first congressional district.  An African American woman named Angela McGlowan is warning there against the establishment back state senator Allen Nunnally and ex Bush Justice Official Henry Ross.  Results still coming in for that race but at the moment with 21 percent of precincts for reporting.  The establishment candidate senator Nunnally has 51 percent of the vote.  Obviously, hoping to avoid a run off there.  The polls in New Mexico closed about half an hour ago, 9:00 p.m. Eastern.  Results are still coming in from New Mexico, too close to call for those races so far.  But next Tuesday, of course, will be another big election night, another opportunity to play my favorite song. 
Next Tuesday, election in 12 states, ten primaries, the Arkansas runoff election and a special election in Georgia.  Those results will come with analysis, experts trying to extrapolate what they mean for November.  As meaningful from tonight‘s results and results next Tuesday will be to the winner and to the non winners, they won‘t necessarily have much predict the value for November‘s big show down for control of the house in the senate in the state houses.  We like to extrapolate from storylines that we like.  We like to down play the storylines that we don‘t like.  But honestly, when you look at the predictive value of primaries, it sort of comes down to turnout.  Voter turnout is the one that actually sort of can foretell the midterm results.  Which party‘s base was more motivated to actually show up on primary night?  That party could have an advantage come fall when the chips are really down.  And turnout numbers take time to determine. 
Here are some of the most important turnout numbers from the last primary night, in the May 18th primaries most notably in Kentucky.  Remember Rand Paul.  Of course you do.  Don‘t be coy.  Dr. Rand Paul walloped the republican establishment pick in the senate primary in Kentucky.  Trey Grayson came in second.  For all the election night coverage, and event he coverage that followed, the voter turnout numbers suggest something rather more important about those Kentucky senate races.  The loser of the democratic senate primary, the loser on the democratic race got more votes than the winner of the republican race.  Rand Paul won his primary over Trey Grayson with just under 207,000 votes.  Lieutenant Governor Dan Mongiardo had 225,000 votes and the Democratic winner, the Kentucky Attorney General Jack Conway had 229,000 votes. 
So, more democratic voters than republican voters decided to show up and vote despite there being a lot more national attention to the republican race.  That is interesting.  So, we will keep an eye on all the races tonight and for the race of the primary season.  We‘ll also keep track of who turned out in what numbers which may actually be the most important thing that happens on these exciting Tuesday nights. 
Joining us now is Ed Schultz, host of MSNBC‘s “The Ed Show” and author of the new book “Killer Politics: How Big Money and Bad Politics Are Destroying the Great American Middle Class.”  Ed, thank you so much for being here. 
ED SCHULTZ, “THE ED SHOW” HOST:  Thank you, Rachel.  I know why you like that animation.  It has an official sound to it.  Any time you can do something official, right?
MADDOW:  It makes me feel I belong here. 
SCHULTZ:  Yes.
MADDOW:  This is exactly what I meant to be doing.  When you look at what is going on, and obviously tonight, not a huge primary night but races are happening.  Had a slightly bigger one last Tuesday, definitely bigger one coming up next Tuesday.  These primaries, are they starting to give shape to you—any shape that you can see to what is going to happen in the midterms?
SCHULTZ:  Well, I think next Tuesday night in Arkansas, it‘s going to be big. 
MADDOW:  Yes. 
SCHULTZ:  Because this is really the first of four senators on the democratic side and the independent side that fought health care, the public option and some other provisions in there that was supposed to be part of the government takeover.  Yes.  Joe Lieberman, Ben Nelson, Mary Landrieu and Blanche Lincoln.  Lincoln is the first one—she‘s facing a tremendous challenge from Bill Halter, Lieutenant Governor who is getting a lot of support from progressives around the country.  And if the progressives win that primary, I think it sends a statement that there is not going to be this huge land fall of republican seats being won in the midterm. 
Because the progressive base still got a pretty good grip about what this mission is all about, that what happened in the last eight years and how the deregulation has handed this.  All this multitude of problems that have been out there.  And I think there is a great deal of awareness and consciousness amongst the progressives in this country that this is an opportunity and I‘m giving analysis of how I think the progressive movement views this.  This is an opportunity for the democrats, the liberals, the progressives to take out a corporate democrat and that is Blanche Lincoln.  Now, she may have done some good things but how she is viewed and perception is everything right now. 
MADDOW:  Do you think—do you buy the common wisdom that‘s electing a more progressive democrat in a conservative state, relatively conservative state like Arkansas, sets democrats up worse for the general election?
SCHULTZ:  Well, no, I don‘t.  I think it sends a message to other centrist corporate democrats that are out there.  They get too cozy with Wall Street, they get to cozy with the big money, that, you know, there is going to be a wakeup call.  And you could find yourself on the radar screen of the people who are still into this hope and change and believe that we‘ve got to do something in this country to get the middle class back thriving again. 
MADDOW:  I was struck in the book, you make the case that, you know, there was all this work done, essentially to pave the way for Obama‘s election, all this work done on the progressive side.  And when he was elected, you sort to make a joke about like everything is fine, and we can all just go fishing, everything is done.  And on the one hand, you‘re sort of making this case that people need to keep fighting.  I mean, you on the cover, you have boxing gloves on.
SCHULTZ:  Yes.
MADDOW:  On the other hand, I think, you sort of, in the book and a lot of different ways document that liberals really still are fighting.  That people haven‘t been back on their heels and resting and demoralized by the fact the politics are still difficult. 
SCHULTZ:  We are not afraid to throw our folks under the bus.  I mean, if they don‘t do what they said they were going to do when they are running.  And I think that really is the difference between the progressive movement and the conservative movement in this country.  I mean, the conservatives, they are line up for the good of the order.  What I think democrats are doing right now, the ones that I describe in write about in the book, are ones that are bound and determined.  I mean, we are at a very crucial point in this country‘s history. 
We are either going to do this or we are not.  We are going to make sure that the working families of this country have a fighting chance. 
And one of the things that I really wanted to accomplish in this book was I wanted the tone to represent what I have heard on the road for the last two and a half years of doing town hall  meetings.  And I kept getting this reoccurring theme from people and all the different markets we were going to, like we are falling behind, and nobody is saying anything about it.  So, I wanted to write a book on the middle class and represent the everyday struggles and the numbers.  There‘s a lot of research in the book are just absolutely staggering on what has happen for the top one percent, the deregulation that‘s taken place, the dirty money in politics that has shaken down the politician and influence the election.  And who is out there with almost no representation, the middle class.  And if we just have a country of super rich, rich and the dirt poor, we are not going to be a great country.  And we can save this.  I know we can.  And I‘ve got a road map there. 
MADDOW:  And the corrosive effect in American values to lose the middle class, I think is something that you sort to nail both in the way that you present it and the way argue it.  So, Ed, I enjoyed the book.  And I‘m happy, I got you to stay up late and come on my show. 
SCHULTZ:  I appreciate it very much.  Thank you Rachel.  It is great to be on with you. 
MADDOW:  Ed Schultz is going to be broadcasting from Arkansas the night of the Bill Halter and Blanche Lincoln primary which is going to be very exciting.  I might piggyback on that trip if I can, you never know. 
SCHULTZ:  Arkansas is a wonderful place.  Little Rock will be there next Tuesday night.
MADDOW:  Excellent Ed.  All right.  “Killer Politics: How Big Money and Bad Politics Are Destroying the Great American Middle Class” is the name of Ed‘s new book.
All right.  Still ahead.  How should politicians misrepresent their military careers be punished?  Fined and imprisonment from their Conservative Utah Governor Orrin Hatch.  Unless it is a republican budging his record and then, sort of a stern talking to, pat on the back of creativity maybe.  Orrin Hatch gets caught out being very, very partisan in a bad way.  Please stay with us.
(COMMERCIAL BREAK)
MADDOW:  Since 2007 the group Hamas has been in control of the Palestinian territory that‘s known as the Gaza Strip.  Since then Israel and Egypt have tried to block access to Gaza from the sea.  The idea being that isolating Gaza will turn the Palestinian people against Hamas.  It‘s also lead to a number of attempts by pro-Palestinian activists to subvert the blockade in order to get supplies into the people who live in Gaza.  Yesterday for something like the ninth time in the last three years, activists attempted to flout the blockade.  This time, it was a flotilla of six ships carrying thousands of tons of relief supplies and hundreds of pro-Palestinian activists.  It was organized by an international coalition called the free Gaza movement. 
About 80 miles offshore in international waters, Israeli defense forces intercepted the ships.  This is video shot by activists that aired on Turkish TV yesterday.  It shows Israeli commandos boarding one of the vessels, a Turkish cruise ship.  Nine of the activists on board were killed by the commandos in the ensuing fight.  Both sides are now waging a public relations battle in terms of how this is going to be seen and reported on by the international community.  This is video release by Israeli defense forces of the same incident. Reporting the show, the activists on the Turkish ship attacking the Israeli forces.  Turkey has been the Muslim country that‘s been perhaps the closest ally of Israel.  But Turkey‘s Prime Minister today described Israeli troops killing the activists as a, quote, “Massacre.”  Early today, the united Nations Security council releases the statement expressing, “deep regret at the loss of life and injuries resulting from the use of force during the Israeli military operation.” 
The Security Council said that condemned to those acts which had killed and wounded civilians and called for a quote, “prompt, impartial, credible and transparent investigation.”  The Obama administration today announces report for the U.N. Security Council resolution but other wise refuse to take sides in this fight.  Where this incident between any two other countries, the diplomatically percussions would be comparatively simple and blunt, but because this involves Israel, the diplomatic fallout here will be tense and intense and it will go on for a really long time and they will all be parsed with minute acuity. 
Meanwhile, the same activists who organized the Flotilla that was raided this weekend say, two more of their ships are on the way toward Gaza now.  We will keep you posted.    
(COMMERCIAL BREAK)
MADDOW:  One of the founders of Al Qaeda is dead.  Now, granted this is one of those guys who keeps dying over and over again.  In August 2008, Pakistani military sources said he was dead in North of Peshawar in the tribal areas in Pakistan.  But he wasn‘t really dead.  Then, the next year Pakistani media said, he was dead again, this time in North Waziristan.  But again, he wasn‘t really dead.  After he was supposed to be dead that time, he turned up in a new Al Qaeda video, very much not dead.  Now he is dead for real.  At least Al Qaeda says, he is dead. 
And they tend to be less wrong about dead Al Qaeda guys than law enforcement sources usually are.  I mean, he was apparently killed by a u.s. drone strike in North Waziristan a week ago, Saturday.  He was described in a 9/11 commission report as Al Qaeda‘s chief financial manager, sort of their day-to-day hands on organizational operational guy.  He and Ayman Al-Zawahiri were in prison together in the 1980‘s, he founded Al Qaeda with Osama Bin Laden in Afghanistan, he moved with Bin Laden to Sudan, and then back with him to Afghanistan before 9/11.  He was always said to be close to Mullah Mohammad Omar as well as Zawahiri and Bin Laden, and all of those connections make him being dead a very big Al Qaeda deal. 
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
RICHARD BLUMENTHAL, DEM. NOMINEE FOR U.S. SENATE, CONNECTICUT:  On a few occasions I have misspoken about my service and I regret that and I take full responsibility.  I may have misspoken.  I did misspeak on a few occasions out of hundreds that I have attended whether events or ceremonies and I will not allow anyone to take a few of those misplaced words and impugn my record of service.  I regret that I misspoke on those occasions.  I take full responsibility for it. 
(END VIDEO CLIP)
MADDOW:  Connecticut Democratic Senate hopeful Richard Blumenthal attempting to clean up after revelations that he inaccurately described his military record.  Mr. Blumenthal served stateside during the Vietnam War.  Not actually in Vietnam.  Republican efforts to capitalize on that, sure and fast.  Barely a week after Mr. Blumenthal‘s apology for misspeaking, Republican Senator Orrin Hatch had already introduced  legislation to threaten six months in jail for anyone misrepresenting his or her military record, quote, “whoever knowingly makes a fraudulent statement or representation verbally or in writing regarding the person‘s record of military services in the United States Armed Forces, including but not limited to participation in combat  operations for the purposes of gaining recognition, honorarium, official office, or other positions of authority,  employment, or other benefit or object of value as a result of that statement, shall be fined under this title, imprisoned not more than six months or both.”  Find or imprisoned or both.  Tough, right, really tough?  Depending on who you are. 
Just days after Senator Hatch introduced that “six months in jail” amendment, overtly inspired by the Richard Blumenthal case, “The Washington Post” published an article about another would be senator embellishing his military record.  The problem for Orrin Hatch, this time, the guy is republican.  It‘s Congressman Mark Kirk, the republican running for President Obama‘s former senate seat in Illinois.  Mr. Kirk has had a long career as a u.s. navy reservist, but he also describes himself on his website as navy intelligence officer of the year.  Now, the navy does name a reserve intelligence officer of the year.  Mark Kirk never received that award.  Mark Kirk was in a unit in Italy that once got an intelligence award from a professional group, the whole unit, but that‘s as close as we can get to that award listing being true.  When called out, Mr.  Kirk explained that it had been a misprint. 
(BEGIN VIDEO CLIP)
REP. MARK KIRK(R-IL), RUNNING FOR SENATE:  Well, we misidentified the award.  I actually received the Rufus Taylor intelligence unit of the year award.  But we misidentified it, and so when the staff saw that it was a different title, we changed my official biography. 
(END VIDEO CLIP)
MADDOW:  Except it wasn‘t just on his official biography.  Mark Kirk has also in person, out loud, congratulated himself on his fake navy intelligence officer of the year award, in Congress. 
(BEGIN VIDEO CLIP)
KIRK:  I‘ve been in office just one year.  Before that, I was a navy reserve intelligence officer, was the navy‘s intelligence officer of the year in 1998. 
(END VIDEO CLIP)
MADDOW:  No, you weren‘t.  Congressman Kirk also cited his fake navy intelligence officer of the year award in his campaign ads. 
(BEGIN VIDEO CLIP)
ANNOUNCER:  Determined to make a difference for his community and defend America, the navy named Mark intelligence officer of the year for his combat service in Kosovo. 
(END VIDEO CLIP)
MADDOW:  Except it wasn‘t given by the navy and it wasn‘t an award for Mark Kirk.  On the excellently named the blog, the nitpicker, which sparked some of the initial reporting on this story, Afghanistan war vet Terry Welch also points out that Mark Kirk‘s official congressional website claimed in 2005 that Mark Kirk was the only member of Congress to have served in operation Iraqi freedom.  Congressman Kirk did not serve in operation Iraqi freedom.  He did not serve in Iraq.  Welch has posted screen shot of the congressman‘s website, showing that after Kirk was confronted about the operation Iraqi freedom issue, he just quietly changed the website without comment or explanation. 
So, even if you set aside the operation Iraqi freedom thing, if Congressman Kirk for years kept saying the navy named him intelligence officer of the year, even though he never got that award, does that mean that Orrin Hatch wants to put his fellow republican, Congressman Mark Kirk, in prison for six months?  No, of course not.  Don‘t be silly.  Remember, this is the language Orrin Hatch wrote when he was just thinking about sticking it to that democrat guy.  He wrote, quote, “Whoever knowingly makes a fraudulent statement or  representation, verbally or in writing, regarding the person‘s record of military service in the United States armed forces, including, but not limited to, participation in combat operations for the purposes of gaining recognition, honorarium, official officer, other position of authority, employment, or other benefit or object of value as a result of the statement shall be fined under this title, imprisoned not more than six months or both.”
Asked by “The Washington Post” if that language applied to Mark Kirk as well, Orrin Hatch‘s spokesperson said, no, of course not, quote, “The amendment‘s intent is clear—it would make lying about serving in active duty in the military for the purposes of career advancement a misdemeanor.”  Clear, right?  So, when Mark Kirk puts out a campaign ad saying, vote for me because I won this award from the navy, that I didn‘t really win, according to Orrin Hatch, that doesn‘t count as misrepresenting your military service.  Because it‘s OK if you‘re a republican.  Always and forever.        
(COMMERCIAL BREAK)
MADDOW:  One of my favorite things about Kent Jones is how much he loves euro vision.  It is a sickness, but a good one.  I like you. 
(LAUGHTER)
KENT JONES, MSNBC:  All right.  So, yes, the euro vision contest, every year it makes “glee” looks like c-span.  Check it out. 
(BEGIN VIDEOTAPE)
(voice-over) As always, euro vision 2010 was a sumptuous smorgasbord of tasty cheese.  From Lithuania, this song is called what else, “Eastern European Funk.”  From Turkey, pop metal and a dancing emo robot.  But this year‘s winner was a 19-year-old high school student from Germany named Lana (ph).  Not to be confused with Lana (ph) who gave us this. 
(MUSIC PLAYING)
KENT:  Lana‘s winning euro vision entry was the peppy satellite in English-ish.  
(MUSIC PLAYING)
KENT:  Ina Klyana (ph) rock ‘n‘ roll.  But wait, a journalist in Bulgaria claims the first part of satellite is eerily close to the theme song of a Bulgarian kids‘ show.  Can you hear it? 
Yes, me either.  Could this be a case of Bulgarian sour grapes?  Bulgaria has never won euro vision.  A fact that should cause that proud nation no shame whatsoever.  In any event, brace yourself for Lana, as the tonic pop goes, she‘s about to be Scorpions big, Falco big, and really, isn‘t it time Germany had a Justin Bieber of its very own?
(END VIDEOTAPE)
(LAUGHTER)
MADDOW:  “Countdown” with Keith Olbermann starts right now.  That was awesome. 
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