The Rachel Maddow Show, Transcript 01/04/13

ED SCHULTZ, "THE ED SHOW" HOST: That is "THE ED SHOW." I`m Ed Schultz. THE RACHEL MADDOW SHOW starts right now. Good evening, Rachel. RACHEL MADDOW, HOST: Good evening, Ed. Have good evening, my friend. Thanks a lot. SCHULTZ: You, too. MADDOW: Thanks to you at home for staying with us for the next hour. This is going to be kind of an epic show. All right. Are you familiar with the concept of wild card weekend? This is wild card weekend. It`s the opening weekend of the NFL play-offs, which is important to know because even if you are someone who does not care at all about football, you should know that the people in your life who do care about football are going to be very distracted this weekend, because there are four really good games. Two on Saturday, and two on Sunday. It`s called wildcard weekend for reasons that are mostly too boring to explain here. Suffice it to say, it`s the first weekend of the play-offs that includes teams that did not all win their divisions, but they got into the playoffs anyway as wildcards. On the occasion of this wildcard weekend in football land, the man who has decided to make himself Washington`s political wildcard is the brand- newly retired Massachusetts Congressman Barney Frank. Barney Frank kicked off the weekend by going on TV this morning and said he would please like to be picked to be the new senator from Massachusetts. He said he would like to be the interim replacement for John Kerry, who is expected to be confirmed soon as President Obama`s new secretary of state. (BEGIN VIDEO CLIP) BARNEY FRANK (D-MA), FORMER U.S. REPRESENTATIVE: A month ago, a few weeks ago in fact, I said I wasn`t interested, which is kind of like you`re about to graduate and they said you got to go to summer school. But the deal now means that February, March and April are going to be among the most important months in American financial -- UNIDENTIFIED MALE: So, you`re going to consider it? FRANK: If I -- yes. I`m not going to be coy. It`s not anything I`ve ever been good at. I told the governor that I would now like, frankly, to do that. (END VIDEO CLIP) MADDOW: I told the governor that I would like to do that. Barney Frank then said to Massachusetts Governor Deval Patrick on national TV, he said, quote, "Coach, put me in." This is not usually how these things work, right? Most people don`t publicly lobby for this kind of job. You`re supposed to say something diplomatic like, "Oh, I`d be honored to accept the position if it`s offered to me. But really, that`s a decision for the governor to make." That`s what everybody else does. Barney Frank, though, wildcard, which is why everybody loves him. Here is how Massachusetts Governor Deval Patrick reacted to that rather surprising development just a couple of hours later. (BEGIN VIDEO CLIP) REPORTER: Would you have preferred that he not go public with that information? GOV. DEVAL PATRICK (D), MASSACHUSETTS: Well, would I have preferred? Does it matter in the case of Congressman Frank what I would have preferred? I have treated those conversations as confidential. And I think in every other case, the person has treated them as confidential. And in Congressman Frank`s case, he has chosen not to on his end. I`m going to keep my end. (END VIDEO CLIP) MADDOW: It is probably true that Deval Patrick has had the conversation about the Senate seat with a bunch of people. But Barney Frank is just going on TV and talking about it and saying that he wants the job. Really, nobody does it that way. The serving Massachusetts Senator John Kerry, of course, has been nominated to replace Hillary Clinton at State. We learned this week he is starting to prep for confirmation hearings. He was at the State Department all day Wednesday. The staff there now say they now expect him to start reporting to the department regularly. They say they`re now working with the foreign relations committee to pick a date for his confirmation hearings. Should he be confirmed, what happens to Mr. Kerry`s Senate seat is this. The Massachusetts governor you see on the right side of your screen there, Deval Patrick, will appoint somebody to fill the seat. So without any sort of political contest, that person gets to hold the Senate job for a few months, until a special election will be held this spring or summer in Massachusetts. Now, Barney Frank is saying that while he would like to be the interim senator for a few months, he doesn`t want the permanent gig. He says he will not run in the special election when it happens. The Democratic Party in Massachusetts, including Barney Frank, have now pretty much coalesced behind who they -- or coalesced around who they want their Senate candidate to be for the Senate seat in the special election. Who they want to hold the seat long-term, right? And it`s this guy. His name is Ed Markey. Ed Markey is currently a member of the House from Massachusetts. And what Ed Markey is doing right now to prepare for a potentially very difficult, very high stakes battle for this very high profile Senate seat, a race that stand alone on the political calendar in the springtime, a race that will get a ton of national attention. What is Ed Markey doing now to get ready for that? He is picking a huge fight with the single most profitable industry on the face of the earth, woo-hoo! Ed Markey is known in Washington for essentially being the sheriff of the oil industry. He is the top Democrat in the House on energy issue, and he has been really confrontational with the oil industry, particularly on safety issues. At a time when lots and lots of his colleagues in Congress have been quietly and happily awash in oil money. But Ed Markey has just been a bulldog on the oil industry over the years, particularly on public safety. During the Deepwater Horizon disaster in 2010, for example, it was Ed Markey who brought national attention to the fact that the big oil companies, including BP, had basically just mailed it in when it came to their oil spill response plans. These documents that were supposed to describe in great detail exactly what they would do in the event of a disaster, Ed Markey hauled the oil industry`s executives up to Capitol Hill to call them on what was really in those plans, to do this -- (BEGIN VIDEO CLIP) REP. ED MARKEY (D), MASSACHUSETTS: These five companies have response plans that are virtually identical. The plans cite identical response capabilities and tout the identical ineffective equipment. Like BP, three other companies include references to protecting walruses, which have not called the Gulf of Mexico home for 3 million years. Two other plans are such dead ringers for BP`s that they list a phone number for the same long dead expert. It just it seems to me that for each of your companies, the only technology you seem to be relying upon is a Xerox machine to put together your response plans. (END VIDEO CLIP) MADDOW: To the extent that Ed Markey is nationally famous, it is for that sort of thing. And he is now -- think about this for a second. He is now look at a hugely high profile Senate race in a couple of months that depending on who he is running against, maybe Scott Brown, it could be a multi, multi, multimillion-dollar special election involving lots of outside cash. Elizabeth warren was just officially sworn in as a U.S. senator yesterday. In her run for Senate for Massachusetts, she made herself the nation`s most high profile opponent of what is probably the second most profitable industry in the nation, the banking industry. The only industry that is scarier than that in terms of the power and influence they throw around in Washington is the most profitable industry on earth, the oil industry. And the most pugnacious confronter of that industry is now going for the other Massachusetts Senate seat. Wow! Ed Markey has not just been an aggressive watchdog on the oil industry at times when there are high profile spills like the Deepwater Horizon spill, but also when the industry has stuff going on that does not get as much national attention, like, for example, the situation we have going on right now in remote, hard-to-get-to Alaska, where a Shell Oil rig laden with 150,000 gallons of fuel and oil has run aground in one of the most pristine, most ecologically sensitive bodies of water in the country. Emergency response teams have been dropped on to that rig in each of the last three days. They report that the rig is upright and stable. They say that no fuel has leaked out to the ocean yet. But this is an ongoing crisis. And the response so far from Washington, led by Congressman Ed Markey, has been swift and rather loud. Congressman Markey is now demanding that Shell turn over whatever contingency plans they had for this rig operation. He provided a statement to us tonight in which he says that given this accident, given the safety failures in the past, he does not support any -- he does not support issuing any new permits to drill in the Arctic. Yesterday more than 40 of his colleagues in the House came out and publicly called for a federal investigation into this incident. And over the course of this ongoing situation up there, the news has just gotten worse and not better for Shell. Shell currently has two rigs in operation in the Arctic. The one on the left is the one that just ran aground off the coast. The one on the right is now as of today reportedly the subject of a criminal investigation. CBS News reporting tonight that the U.S. Coast Guard has opened up a criminal investigation into that Shell rig as a result of, among other things, serious issues with the ship`s safety management and pollution control systems. Tonight, Shell personnel in Alaska who are responding to this latest accident appear to be doing everything they can to limit press coverage of what is going on up there. A reporter with "The Anchorage Daily News", which is a great paper and has been doing intensive coverage on this, a "ADN" reporter attempted to get close to the command center today for this incident, and reported that, quote, "Guards are stationed outside a meeting room that has been turned into a command post. They said no reporters were allowed inside and they wouldn`t even let a photographer snap a quick picture or allow a reporter to glance at the sign-in sheet." This industry that has been facing pressure from Washington over and over again in recent years, again with yet another one of these incidents is in full damage control, again. Joining us now is Jerry Beilinson. He`s deputy editor at "Popular Mechanics". With a no-fly zone and a boat exclusion put in place by the Coast Guard and Shell, it is pretty much impossible to get firsthand reporting from the scene out there. But Mr. Beilinson follows the oil and gas industries for "Popular Mechanics". And he spent four days on board this specific Shell rig back in October. He is well-versed in the technological challenges that a company in oil exploration and drilling in the Arctic. You`re looking at some of his footage of the Kulluk pipe deck as it passed through the Beaufort Sea north of Alaska. Mr. Beilinson, you obviously know these things better than I do. It`s nice to have you here. JERRY BEILINSON, POPULAR MECHANICS DEPUTY EDITOR: Thank you. MADDOW: The unified command team up there in Alaska, which includes the Coast Guard and Shell, they have put up five-mile no-fly zone, a one- mile no boat zone around this stranded rig. I tend to trust the Coast Guard, even if I don`t trust the oil companies, but I don`t know if that is overkill or if that is appropriate given how much that will crimp the ability of any reporters to actually cover what`s happening there. BEILINSON: Yes, it`s a little hard for me to second guess the Coast Guard, which I really love. Those guys are really good, especially in Alaska. Their helicopters are flying around and they are putting people on and off that rig. I would assume that it`s for safety, and those helicopter pilots are risking their lives every time they go out to that rig. So I would assume that they`re trying to keep tourists and probably journalists away, but not so much to limit information as to limit access for safety reasons. I don`t read too much into that. MADDOW: Yes, and I don`t know whether or not or not to. I`m inclined to trust the Coast Guard in situations like this if only purely on the basis of expertise. But it is also striking to see how much Shell is trying to keep this quiet, and trying to keep reporters out, and trying to keep journalism away from this, trying to downplay it. How big a risk do you think this is to this ecologically sensitive area? We`re talking about 150,000 gallons of fuel and oil. BEILINSON: It`s a really great question. So there are two different issues, I think. One is this oil rig with this amount of fuel on board in this area. And the other one is Arctic drilling. And they`re really two separate things. MADDOW: Yes. BEILINSON: So this is not a large amount of fuel compared to freighters that run aground a couple of years ago, or several years ago, there was a freighter in the allusions that ran aground. And often those carry a lot of fuel, bunker fuel, which is very bad. It`s just dark, gooey, disgusting stuff, and it`s terrible to get into the water. Freighters and tankers also run aground have posed great risk. So I think that the Kulluk has run aground. We don`t want any of that fuel in the water. The thing that pollutions will be looking at and regulators will be looking at is whether or not we want drilling in the Arctic, which is entirely different and much bigger in my mind issue. MADDOW: And that has sort of a new pointedness to it with the prospect of Ed Markey not just being the top Democrat in the House on this issue, and as a person who is being so willing to be confrontational with the companies on this, but potentially going into a very high profile race and joining the Senate. That puts a real political edge on it. Do you feel like the political concerns expressed around the Arctic are well-informed? Do you feel there is reason to have real political concern over that? BEILINSON: Oh, well sure. One of the things that happened this year, Shell went through one mistake after another and just had a terrible year. There was air permits that they weren`t able to comply with, a containment vessel that broke in a really dramatic fashion. And a lot of Shell`s biggest critics were surprised Shell didn`t do better this year. Everyone thought they would be able to pull off drilling really smoothly. So, there is a lot of well informed debate especially in Alaska and especially on the north slope about whether we should be drilling for oil in the Arctic or not. Shell is only the first of several companies that have leases out there, and they`re kind out in front. But behind them is ConocoPhillips, Statoil and other companies. And so, they`re talking about real offshore industry which has really existed up there. And that`s an issue that will be a big one in the next few years. MADDOW: And it`s going to be continually a big one in the next few days, I think, as this situation continues to not get resolved in Alaska. We hope that it will. Will you come back and talk to us about this more? BEILINSON: Sure. There is some reason to think if Kulluk will be pulled off where it was grounded in the next couple of days. That hasn`t made public yet, but I sort of understand that`s what they`re hoping to do. MADDOW: We will stay on it. Thank you for that. Jerry Beilinson, deputy editor of "Popular Mechanic", spent four days aboard the Kulluk back in October. Appreciate your time. Thanks a lot. BEILINSON: Thank you. MADDOW: All right. We`ve got lots ahead tonight, including an end to the show tonight that is slightly epic. Hold on. (COMMERCIAL BREAK) MADDOW: Here is something I did not see coming. The first day of the new Congress was yesterday, right? And we have been saying for months that on the first day of the new Congress, and only on that day, the Senate could change the rules that governs that body, including maybe reforming the filibuster rule, which Republicans have been using to require a super majority for pretty much everything in Washington for years now. Well, that is still true. A rules change with just a majority vote to make that change, that really can only happen on the first day of the new Congress. But the reason you didn`t hear anything about the rules being changed yesterday on day one of the new Congress is that Harry Reid decided to redefine what counts as day one of the new Congress. He redefined the first day of the legislative session. The first day will now last until, quote, later this month, which is most likely January 22nd. It started yesterday. It goes on for a while. So you did not remember that detail wrong. It was day one starting yesterday. But so far there has not been the day one vote on filibuster changes, and that still might happen. Also, while we`re talking about the political and news calendar, this is tentative as yet, but Chuck Todd of NBC News is reporting that interested parties have been given a heads-up that President Obama is likely to make his nomination for the next secretary of defense on Tuesday -- maybe Monday, but probably Tuesday. The smart money in Washington says that the nomination is going to be former Republican Senator Chuck Hagel. While that is the smart money in Washington, it is not the only money, and it is not a sure thing. And the reasons it`s not a sure thing turn out to be fascinating. That story is next. (COMMERCIAL BREAK) MADDOW: If news tonight out of Washington, NBC confirming that President Obama is likely to nominate this man, Nebraska Republican Chuck Hagel, to be the next secretary of defense. Mr. Hagel served in the U.S. Senate for two terms, starting in 1997. He was considered in some ways a member of that vanishing species, the moderate Republican back when it was not nearly so vanishing. Senator Hagel served on the Intelligence Committee and the Foreign Relations Committee. After 9/11, he supported the Patriot Act with its sweeping new powers of surveillance. He also supported the war in Iraq. At the time, those were reasonably centrist positions for a Republican to hold. But a couple of years into the Iraq war, Senator Chuck Hagel came out and said that America`s war in Iraq was starting to look to him like the war he himself fought in as an Army infantry officer. It was starting to look to him like Vietnam. He said that between those two wars, quote, "There is a parallel emerging." And a couple of months later, he laid down this gauntlet to those on his own side who had gotten all over him for questioning the Iraq war. He said, quote, "To question your government is not unpatriotic. To not question your government is unpatriotic. America owes its men and women in uniform a policy worthy of their sacrifices." A couple of years later when the president announced that he wanted to send another 20,000 American troops into the war in Iraq, Senator Hagel responded the next day by saying that escalating the war in that way could become, quote, "The most dangerous foreign policy blunder in this country since Vietnam." Because he was a Republican, because he was a decorated Vietnam combat veteran, because he had originally supported the Iraq war, Chuck Hagel became one of the highest profile Iraq war critics in the country. Even as a Republican, he was talked about as a potential vice presidential running mate for Barack Obama in the `08 campaign. On the other side, it was interesting. The Republican nominee that year, John McCain said that Chuck Hagel could have a place in a John McCain presidential administration. Mitch McConnell said at the time, quote, "In two terms in the Senate, Chuck has earned the respect of his colleagues and risen to national prominence as a clear voice on foreign policy and national security." So through all of those years, through all of his willingness to criticize his own side on the most highly politicized issues in the country, Senator Chuck Hagel was able to hold on to the good graces of his fellow Republicans for all of those years, until now. Now, they say they are over him, because now Republican Chuck Hagel is looking like the person President Obama would like to put in charge of the Pentagon. Josh Rogin at "Foreign Policy" first breaking the news on the expected nomination, and noting in the same breath all the Republican senators who say they are against that nomination. Senator John Cornyn saying he can`t support Chuck Hagel because he says Chuck Hagel has a, quote, "problem with Israel." Senator Dan Coats says Chuck Hagel, quote, "has had so much disrespect for the military" -- which is a pretty rich thing to say about a veteran. Senator Tom Coburn says Senator Hagel lacks experience he would need for the job. Senator McCain says his colleague barely even counts as a Republican. Senator Mark Kirk says he is, quote, "concerned about Mr. Hagel." Mr. Hagel also faces opposition from the Democratic side for the time back in 1998 when he opposed an ambassador nominee for being what Mr. Hagel described at the time as, quote, "openly aggressively gay," for which he finally apologized last month. There is also opposition to a lesser extent just because Chuck Hagel is a Republican. This is not ideological opposition. It`s partisan, but in the technical sense of that. Why is it that Democratic presidents always appoint Republicans to run the Pentagon, but Republican presidents never appoint Democrats to do the same? Why would Democrats do that again? Why would Democrats keep underscoring that caricature that Republicans are the only ones to be trusted on defense? You can see just counting on your fingers that the nomination of Chuck Hagel should it go through could be a whale of a fight, maybe the first really big fight of 2013. Hold on. There is more. (COMMERCIAL BREAK) (BEGIN VIDEO CLIP) CHUCK HAGEL (R-NE), FORMER U.S. SENATOR: We better be damn sure we know what we`re doing, all of us, before we put 22,000 more Americans into that grinder. You better be sure as you can be. And I want every one of you, every one of us, 100 senators, to look in that camera and you tell your people back home what you think. Don`t hide anymore, none of us. (END VIDEO CLIP) MADDOW: Then-Senator Chuck Hagel, Republican senator of Nebraska, breaking ranks very publicly with his party and with the Bush administration over the war in Iraq. For a long time afterward, his Republican colleagues continued to call him a dear friend and a respected public servant. But now, now that Mr. Hagel seems to be the likely Obama administration`s second term nominee for secretary of defense, his previous Republican friends seem to be changing their minds about him. Joining us now is Steve Clemens from the New America Foundation. He writes at "The Washington Note:" and "The Atlantic" magazine where he is Washington editor at large. Hi, Steve. It`s nice to see you. STEVE CLEMONS, NEW AMERICA FOUNDATION: Hey. Great to be with you, Rachel. MADDOW: What are you hearing from sources in Washington and the White House and elsewhere about the likelihood that it is going to be Senator Hagel who gets this nomination? CLEMONS: Well, I talked to a couple of folks today in the White House today who said, Steve, the president has not yet made up his mind on who he will select, and no one has been offered the job yet, but the president is going the offer it to Senator Hagel. And that will happen, as Chuck Todd reported, on Monday or Tuesday. MADDOW: Of all the issues that Senator Hagel`s critics may bring up against him, which ones do you think might significantly threaten his nomination, if any? CLEMONS: I think the biggest issue that he has to contend with is a very large franchise of opposition that is concerned about his views on Israel and Middle East issues. I think Senator Hagel has always stood by Israel`s security and Israel`s support, but he is also a person who is very blunt about the point that America can`t afford to make false choices between one nation and it`s neighbors that are also vital partners to the United States. He is very blunt, as blunt about that issue as he was about the Iraq war. And I frankly think it`s smart foreign policy. But I do think that that`s where he is going to get the bulk of his opposition. MADDOW: Steve, you are a guy who speaks bluntly as well. Do you feel like that, the source of the criticism against him on issues of the Middle East and Israel, do you feel like that he has sort of refused to be politically correct in his language in the sort of gesture politics that you`re supposed to make on that issue? Or do you think that it is about his substantive policy beliefs and what he might be like as defense secretary? CLEMONS: Chuck Hagel more than any other senator I have known is not someone to jump on media bandwagons. I had a talk tonight with the former chief of naval operations in Israel who became the head of the Friends in Israel of the USO. Chuck Hagel used to be head of the USO. And he had a long relationship with Hagel over the years. And he approached Hagel and said I hear that you`re not signing on to a press statement that other senators have signed on about getting Jews out of Russia. And Hagel sent him a letter that he had privately sent to President Clinton, as well as President Clinton`s response, and he said the much more effective way to push my government and to push my president is to handle it this way. I have no interest in jumping in the press. He was fully supportive of the effort, but he had very little interest of playing the puffery games in the media. That`s the kind of guy Hagel is. And I frankly respect it. MADDOW: What do you make of the criticism from the other side, particularly the criticism that Democratic presidents, in some cases have almost reflexively chosen Republicans to run the Defense Department? And that supports this sort of caricature that Republicans are the natural party of defense and Democrats aren`t? CLEMONS: Well, two quick things. Leon Panetta is a Democrat and he is secretary of defense now and he has, you know, put himself between two Republicans Bob Gates and Chuck Hagel. But the second thing, and I mean this as no negative take -- there are very qualified, competent people in the Democratic Party who are more than competent to run the Department of Defense. That said, the Democrats that came in -- many of them that came in with President Obama, that were also part of the concern that Americans don`t trust Democrats to deploy power, to be forceful in the world have adopted in many of the institutions they have built in the last four to five to six years a Pentagon-hugging strategy of not wanting to reform or cut because of the fear that they will be considered Vietnam Democrats, anti-military Democrats. So, to send in a Republican in an era of austerity to slash budgets and to basically send a message that at the end of this, we`re going to apply intelligence and technology to our security platforms and come out with more security deliverables, even though we`re spending less is something that I think President Obama thinks a Republican like Chuck Hagel can do better than other candidates that are in the field. MADDOW: That`s fascinating. The politics here are fascinating. I would love to get blunt assessments of how they`re viewing those politics in Washington, and we never will. But you can see them better close up than anybody else I know. Steve Clemons of the New America Foundation, "The Washington Note" and "Atlantic" magazine -- Steve, as always, thank you. CLEMONS: Thank you, Rachel. MADDOW: Thanks. We`ve got a "Department of Corrections" coming up. And if that doesn`t sound epic to you, then you are the one who is wrong. (COMMERCIAL BREAK) MADDOW: Pop quiz. All right. The date is August 29th, 1996. What is going on in American politics on that date? OK. It`s 1996. So it`s an even numbered year. That means it`s an election year, and `96 was, in fact, a presidential election year. Those were the Clinton years. So, right, Bill Clinton was president. 1996 he was running for reelection. And in late August, that would mean we`re getting close to Labor Day, which means it`s getting to be time for the conventions. August 29th, 1996. Here was on that date the White House press briefing. Peter Knight, the national campaign manager of the Clinton/Gore campaign, and Leon Panetta, who was White House chief of staff at the time. Now, he is secretary of defense. But then he was Bill Clinton`s White House chief of staff. And on this date, on August 29th, 1996 in American politics, Leon Panetta was White House chief of staff. And that night his boss, Bill Clinton, was due to give his big speech, his speech at the Democratic Convention, accepting his party`s nomination to be reelected president of the United States. Huge day for the Clinton White House, right? And on that date, at the White House press briefing, seven of the first 10 questions that Leon Panetta and company got asked by the press were not about President Clinton and his big night. The press was totally distracted from that that day. The country was totally distracted from that. What was it that rained on the Clinton campaign`s big parade? This day, the day he should have been triumphantly starting his March to reelection, what was it? It wasn`t a war breaking out, an international incident. It wasn`t anything the Republicans had done to derail the attention from President Clinton on the most important day of his reelection campaign. What was it? It was something else that just submarined that whole moment in presidential politics, that whole crucial day in that campaign. What was it? That`s next, because it turns out it is still around now. (COMMERCIAL BREAK) MADDOW: OK. In the last 100 years, the only Democrats to have been elected president and then reelected president are FDR, Bill Clinton, and Barack Obama. That`s it. There are only three of them. Truman doesn`t count because he didn`t get elected president for his first term. He got to be president when FDR died. So Truman himself only ran for president once. Same thing for LBJ. He could have run for his own full second term, but he decided not to. So, in the end there have been only three Democrats elected to two terms in the whole last century. And of those three, we think about the Clinton one. We think about the Clinton reelection as having been kind of a gimme, right? Because he ended up beating Bob Dole by so much. But in the middle of that campaign, it did not necessarily seem linebacker it was going to be so easy. President Clinton`s opponent, Mr. Dole, had the luxury of competing for his party`s nomination that year in a primary that kind of looked like Bob Dole and the seven dwarves -- no offense to dwarves. Bob Dole`s major competitors in the early primaries that year were Pat Buchanan -- oh, Uncle Pat. Also, there was Steve Forbes. Of course, there was Lamar Alexander, whose main campaign trope was he wore a plaid shirt everywhere. Shockingly, that was enough to propel him to the nomination. So, Bob Dole locked it up without too much work. He had national name recognition. He had been in Congress for 35 years, and he was a truly inspiring war hero who had been wounded in World War II. And he is a very likable guy. And heading into the summer before the election, it did not seem like this young first term President Bill Clinton was going to be storming to a massive reelection victory over war hero Bob Dole. After Senator Dole locked up his party`s nomination, he made a surprise announcement that he was going to resign from the Senate after three decades in Congress in order to devote himself fully to the race for presidency. That was a really big deal. He also picked for his V.P. a man named Jack Kemp, who was really, really conservative, but who was also seen as a popular choice, an interesting choice at least in that it totally locked up the conservative base behind that ticket. It also added the whole football hero thing to the whole war hero thing on that side of the ticket. So that`s what was going on on the Republican side. They had a lot going their way. On the Democratic side, there was some trouble. You remember Whitewater? The whole Whitewater sort of wild goose chase, sort of scandal that was breaking open that spring and summer? The governor who took over in Arkansas after Bill Clinton left to become president, that governor got convicted in the Whitewater case. The president`s business partners on the Whitewater deal got not just indicted but convicted in the case. So, at that time back then, Bob Dole was making some smart decisions, running a pretty good campaign, and there was this long simmering scandal roiling the Clinton White House. And yes, President Clinton was ahead. But it was not a sure bet in 1996. And so, rolling toward that election, at the end of the summer, 1996, the nominating conventions for both sides ended up being important, and also sort of unexpectedly entertaining. (BEGIN VIDEO CLIP) AL GORE, FORMER U.S. VICE PRESIDENT: Tradition holds that this speech be delivered tomorrow night. But President Clinton asked me to speak tonight. And you can probably guess the reason why -- my reputation for excitement. This is some crowd. I`ve been watching you doing that Macarena on television. And if I could have your silence, I would like to demonstrate for you -- (CHEERS) GORE: -- the Al Gore version of the Macarena. (CHEERS) GORE: Would you like to see it again? (END VIDEO CLIP) MADDOW: Al Gore`s single best moment of the 1996 campaign. But the thing he referenced at the top there about the timing of his speech supposed to be tomorrow night, that ended up being really important. Al Gore did give his speech a night earlier than would have been normally expected based on tradition. It was the next night that Bill Clinton ended up giving his speech, not Al Gore. And overnight, in between Al Gore silently doing the Macarena on Wednesday night and everybody in Washington waking up on Thursday morning, overnight, that overnight the Clinton campaign had a political disaster. It was the day of President Clinton`s acceptance speech at the Democratic Convention, and out of the blue, with no warning on that day that the president of the United States is due to address his party`s convention to give his big acceptance speech -- on that day, this long-awaited thing and the suspenseful campaign, the crowning moment of the reelect, what happened that day to overshadow the president? What happened all of the sudden that particular crucial day? Hooker scandal. (BEGIN VIDEO CLIP) TOM BROKAW, NBC NEWS: Tonight, the man widely credited with bringing President Clinton back from a political near-death experience is gone. He has been forced from the campaign by a tabloid newspaper`s claims that he had a long-standing relationship with a Washington call girl that included sharing with her inside information from the White House and the first family. He is Dick Morris, and although he is little known to the general public in politics, he has been a very effective hired gun for Republicans and Democrats alike. (END VIDEO CLIP) MADDOW: That was day four of the Democratic Convention, the day the president gave his acceptance speech, the reelection campaign`s moment in the sun. But instead of covering that as a moment in the sun, all the questions from the press that day, all the coverage of his big speech that day had to include stuff like "Clinton`s day was marred by the resignation of Dick Morris, his chief political strategist, in response to a published report that he had maintained a relationship with a $200 an hour prostitute and had let her listen in while he talked to Clinton on the phone." That year when papers did tick-tocks of what happened during the course of the campaign, what they had to say than date, about August 29th, 1996, was Clinton accepts Democratic Party nomination on the same day that his chief campaign strategist Dick Morris resigns amid tabloid newspaper reports of liaisons with a prostitute. That was "The Hartford Courant`s" tick-tock of the campaign that year. Their lead editorial of what happened was this: "Dick Morris Spoils the Coronation." Now, we think of Dick Morris as just this guy on FOX News who is part of the conservative pundit sphere, right? But at that time, when he was all but ruining the reelection campaign that he was supposedly helping the mange, he was really big deal. This was the cover of "Time" magazine the week after the Democratic Convention that year, "The Morris mess, how it could hurt Clinton after the fall." The week before that, the previous cover, had also had Dick Morris on that, as the man with Clinton`s ear, which were particularly awful image when the details of the Dick Morris hooker scandal that emerge included that allegation that Mr. Morris had let the woman he hired for sex listen in on his own private conversations with the serving president of the United States. The woman he hired eventually told a TV show called "Hard Copy" that she decided to sell her story, and go public, because, quote, "It has to be told, whether I`m a call girl or who will blabber or whatever, what they want call it, fine. But wake up America, I mean, if he told me, who else did he tell?" So, yes, it was week one on the cover of "Time" magazine, and here was week two. Nice timing. It was just a blockbuster humiliating fall in the middle of the president`s reelection campaign. And that is how Dick Morris became a famous person. Of course, President Clinton did recover. After accepting Mr. Morris` resignation, he went on to win reelection. Mr. Morris went on from his hooker scandal to become a vociferous conservative, who writes books about how sleazy the Clintons are, which is ironic. But that industry is a profitable industry, the green room at the FOX News Channel, for example, has a lot of room for folks with that particular type of expertise. And that is how they came to feature Dick Morris, tearing a famous wide path of mis-prognostication throughout campaign 2012. (BEGIN VIDEO CLIP) DICK MORRIS, FORMER CLINTON ADVISOR: There is no chance that Obama will get reelected. SEAN HANNITY, FOX NEWS: I don`t agree that`s true. I think it`s possible. MORRIS: Zilch, none, zip, nada. Romney will win by a very large margin, a landslide, if you will. And we`re also, by the way, going to win 10 seats in the Senate. I believe we have a shot at not only winning in the Senate but 60 votes. (END VIDEO CLIP) MADDOW: Nice try, but there is, of course, no President Romney now getting ready to start his first term with his Republican super majority in the Senate. But this was what FOX News was selling before the election. This is the electoral map, in fact, that Dick Morris predicted would happen this Election Day, and this is what actually happened. Thank you. A lot of people were wrong about this year`s election. But Dick Morris was one of the more spectacularly wrong. He was so wrong that he quickly became a touch stone for how bad the right had been this past year at reading the polls and the other political basics of covering the election. But why were they so bad at it? And was it connected to their roles not just as pundits but as activists and political operatives. Guys who are not just opining in favor of Mitt Romney winning the election, but guys who were actually working to help Mr. Romney win. It`s an interesting question, right? Is that why they were so wrong? Well, in that context, we did a show did a segment last month on Mr. Morris` fundraising and activism leading up to this past year`s election. And in response to that segment, we got this letter from Mr. Morris` lawyers, demanding a correction. And honestly, our policy here on the show, anything we get wrong on the air we are happy to correct. We are always glad to correct our mistakes. And I will. But what is weird here in the specific instance is what we did not get wrong, that these guys are nevertheless very, very upset about. Check this out, OK, we`re talking about a super PAC here, Super PAC for America. This is a Super PAC for America fundraising appeal from Dick Morris dated October 24th, 2010. It was posted on his Web site, DickMorris.com. His name was on the byline. The note outlines what he says is his plan to get Republicans elected to Congress in the 2010 election. In this note, Mr. Morris asks for donations. He says, quote, "My organization, superpacusa.com, is targeting 24 seats and TV ad buys now going on the air set to run until Election Day. We`re still short of what we need to fulfill this entire mission, including opposing Barney Frank. The Boston media market is very expensive. So please give us a sizeable donation as you can, as quickly as you can. We are raising almost half a million a day and we need to keep it going." If you are moved by that and click through to donate to what Dick Morris calls, quote, "my organization," you get sent to the Super PAC for America Web site, this is what Dick Morris described as "my organization" in that October 2010 fundraising note. What`s weird is that the letter his lawyer sent us, insists that even though Dick Morris called the super PAC "my organization," he now insists that this super PAC should be describe as Dick Morris` super PAC. The letter says he did not organize control or make any financial decisions for super PAC for America. What`s weird is that the letter says Mr. Morris was only involved with the super PAC at all, to the extent the group asked him to help out with a specific fundraising drive the help elect Mitt Romney as president, which Mr. Morris agreed to do. Yes, but, dude, there he is, back in the 2010 election campaign, when Mitt Romney was not even running for campaign. There he is, soliciting donations with a super PAC, calling it "my organization," saying it was using it to elect Republicans to Congress. So, this is weird, right? I mean, for whatever reason, Dick Morris is trying to distance himself from the super PAC, and he is demanding in this letter that I help him distance himself from the super PAC that he called his organization. OK, for the record I am happy to clarify that the national chairman of the organization is a man named Michael Reagan, and that Dick Morris`s title is "chief strategist." But he is the one who called it his organization. That was not me making it up. And if he wants to deny he called it his organization, Dick Morris can take that up with whoever it is that signs the name, Dick Morris to letters that get posted at DickMorris.com. He can also take it up with the donors who believed when they saw the message at DickMorris.com byline Dick Morris, asking for money from what he described as organization, you can tell the donors that that was not really his organization. You can tell that to those donors. And that is one of the most interesting things about this whole story and saga. It`s one of the reasons we reported on this in the first place is part of a broader effort to try and understand the conservative movement, and its relationship to the Republican Party and how this conservative media and conservative activist groups do or do not ultimately contribute to Republicans winning elected office. I mean, super PACs are pretty much designed to big donors, if you want to donate 100 bucks or 200 bucks to get Mitt Romney elected, it makes the most sense to give the money to Mitt Romney`s campaign directly. It is only if you want to donate 200,000 bucks or 2 million bucks, more than you`re allowed to donate directly to a campaign, it`s only that it really makes sense then your donations to a super PAC which is not allowed to coordinate with the Romney campaign. I mean, super PACs are usually the realm of the mega donor for a reason. But not the case with this one. As Open Secrets noted, the last FEC filing of the 2012 election cycle showed Super PAC for America pulling in small contributions in droves, raising $2.1 million in contributions of 200 bucks and under in the final run-up to the election. That is part of the reason people took notice when those same FEC filing showed the super PAC spends such a huge proportion of its money in that same period on fundraising. I mean, where does this money go? They`re raking it in in little $50, $100 checks from people all over the country. Is it really going to defeat President Obama and elect Mitt Romney? Where is it going? In the weeks leading up to the election, one of the largest expenditures of the super PAC for which Dick Morris serves as chief strategist, went to a group called "Newsmax" underline items listed in FEC documents as fundraising. We reported that in the story that earned us this letter from Mr. Morris` lawyers. And we reported and it is true. In the last weeks before the election, the last period reported to the FEC and the 2012 election cycle, the super PAC raised just over $3 million. And they paid $1.7 million to Newsmax for fundraising. But that money that goes to News Max, does any of that money that goes to "Newsmax" for advertising, ultimately come back to Dick Morris` own enterprise, to DickMorris.com, right? Since paying "Newsmax" for the use of the DickMorris.com email list, it`s one the ways that Dick Morris makes money, we raised the prospect for what a substantial portion of what Dick Morris was raising through his super PAC, supposedly to defeat Barack Obama, was actually just being redirected back to himself, through these expenditures to "Newsmax". And I use that word on the air, "substantial". In truth, we do not know what proportion of the money raised by Dick Morris and his super PAC, supposedly to defeat Barack Obama, was actually redirected to Mr. Morris himself. We don`t know how much. Nowhere in the FEC document does it say how much of the money that went to "Newsmax" ended up eventually going back to Dick Morris, under the auspices of brokering his email list or for any other reasons. But Mr. Morris`s lawyers do confirm that "Newsmax" is the broker for the DickMorris.com mailing list. They do confirm that the super PAC money was paid to "Newsmax". They do confirm that what some of that money was for was to broker the DickMorris.com mailing list, but they dispute that it was a substantial portion. I do not have evidence whether or not it was a substantial portion. So, I should not have used that word, mea culpa. I`m happy to correct that part of it. When we get stuff wrong I`m happy to make a correction. But on the rest of this stuff? No, when we don`t get stuff wrong I will not take it back just because you do not like the way it sounds, even though it is true. And, hey, while you don`t like the sound of something, sometimes ends up being newsworthy itself. What we learned in this case is that one of the most visible pundits and fundraisers in the country is trying to put distance from himself and the fundraising vehicle he has claimed as his own to donors. Why is that? And as we continue to watch and report on the Republican Party trying to find itself after Bush and Cheney, as we continue to watch the party try to figure out its relationship to the conservative funding and activism complex that monetizes conservative celebrity, not just from talk radio and TV entertainers, but from the most unlikely blast from the past bold face names, it turns out that what`s going to be the most interesting thing to watch next is the response on the right to people starting to question the extent to which their lucrative, slick, activist fundraising tactics really are about electing Republican candidates -- or whether they`re about something else and to what exact degree. Now, it`s time for "THE LAST WORD." Have a good weekend. THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED. END