The Rachel Maddow Show, Transcript 12/22/2016

Kellyanne Conway

Date: December 22, 2016
Guest: Kellyanne Conway

RACHEL MADDOW, MSNBC HOST: And thanks to you at home for joining us this

We do have a very special guest here tonight. I`m very, very much looking
forward to this conversation.

In the presidential campaign of 1984, Ronald Reagan was running for re-
election against Walter Mondale. And in August of that election year as
things were heating up, the Reagan campaign picked just a bull`s eye
religious conservative issue, not just to work on as policy because he was
president, but to campaign on for re-election as well.

And so, President Reagan gave a radio address in August of that year, and
you know, it was designed for the campaign. He was talking about what he
was doing as president, he was haranguing the Democrats in Congress for
making him do it. It was one of the perfectly calibrated campaign year

And you can still get the text of the radio address that he gave on this
subject. You can still get the text of it online at the Reagan Library

Here`s how it starts. Quote, “My fellow Americans, I`m pleased to tell you
that today I signed legislation that will allow student religious groups to
begin enjoying a right they`ve too long been denied – the freedom to meet
in public high schools during nonschool hours.”

So, that`s the issue that he picked. And that`s the text of that radio

Here`s the thing, though – this was a radio address, it was audio only.
He was going to do the radio address from his house in Santa Barbara,
California. As they were setting up for him to give this address, as they
were checking the audio levels and getting him ready to start, he didn`t
just say the top of his speech. He didn`t just say, “My fellow American,
I`m pleased to tell you that I have signed legislation that will allow
student religious groups to” blah, blah, blah. He didn`t say that, which
was the real first line of the radio address, when he was doing his sound
check, while they were setting up his microphone.

He started to do the first line but then he turned it into a joke.


I`m pleased to tell you today that I`ve signed legislation that will outlaw
Russia forever. We begin bombing in five minutes.


MADDOWW: He said that into the microphone. Everybody laughed. “We`re
outlawing Russia forever. The bombing will begin in five minutes.”

After he did that sound check, somebody leaked the tape. But that is what
he said. It was a joke. He had a sense of humor. You know, what`s the
big deal?

Well, the big deal it turns out was he was an American president and the
subject matter was nuclear weapons. Do you know what happened next?

We found this in the NBC archives today. Watch this. This is from two
months after he made that “We begin bombing in five minutes” joke. This is
two months later. This is in October right before the election in November
that year.

NBC News two months down the road, it was finally able to piece together
what happened after Reagan made his “I`m outlawing Russia, we begin bombing
in five minutes” joke. Watch this and watch the graphics here in
particular. This is awesome.


TOM BROKAW, NBC NEWS ANCHOR: It was the joke heard around the world, the
one by President Reagan about bombing the Soviet Union. And it resulted in
a Soviet red alert and it became a campaign issue in this country. Now,
Marvin Kalb has learned that the Soviets responded in their own fashion.

REPORTER: The president was joking his way through an audio check on
August 11th.

REAGAN: I`ve signed legislation that will outlaw Russia forever. We begin
bombing in five minutes.

REPORTER: By August 14th, the story became world news. A major item on
Moscow television where the joke was not treated as a laughing matter.

August 15th, a coded message left Soviet military headquarter in
Vladivostok. It said in part, “We now embark on military action against
the U.S. forces.”

The code was instantly broken by U.S. and Japanese intelligence. This is
what then happened – a special command unit in Yosodis (ph) went on
wartime alert. Key Japanese military units raised their readiness status.
Soviet naval vessels in the North Pacific baffled by the order checked with
Vladivostok. Confusion.

U.S. intelligence originally canvassed for signs of an imminent Soviet
attack, found none.

Later, officials of the top secret National Security Agency briefed
Congressman Michael Barnes.

REP. MICHAEL BARNES (D), MARYLAND: There was what they described as a
wayward operator in the Soviet Far Eastern command who sent out a message,
alerting Soviet forces in that area that a state of war existed between the
United States and the Soviet Union.

REPORTER: Within 30 minutes, the mysterious Soviet alert was canceled.


MADDOW: So, within 30 minutes, the Soviet alert, the Soviet alert that
said there was an active state of war between the Soviets and the United
States, that alert was ultimately canceled after it had been issued.

But that joke from the president in 1984, it started in motion a series of
events that put nuclear-armed warships and military command units in a
state of confusion and in some cases a state of alert. And ultimately
nobody shot anyone and the alerts got dialed back, but whew.

President`s talking about nuclear weapons is nothing to mess around with,
not even if you`re obviously joking.

Today, just before noon, without any warning, apropos of “we don`t know yet
what”, the president-elect announced via Twitter what appears to be a 180-
degree U-turn in American nuclear weapons policy. He wrote this, quote,
“The United States must greatly strengthen and expand its nuclear
capability until such time as the world comes to its senses regarding

That would appear to be a 180-degree u-turn from decades of U.S. policy in
which we`re reducing our stockpile of nuclear weapons. Now, we`re going to
be greatly expanding our nuclear capability “until such time the world
comes to its senses”.

What on God`s green earth does that mean?

And I ask you guys through this camera, I ask you guys these questions a
lot these days when it comes to covering the transition to the new
administration, the difference tonight is that I have someone here to ask
in person.

I`m very pleased to say joining us live for the interview tonight is newly
announced presidential counselor Kellyanne Conway.

Kellyanne, thank you so much for coming back.


MADDOW: It`s nice to see you.

CONWAY: My pleasure.

MADDOW: Congratulations. I have not seen you since the election.
Congratulations on the election.

CONWAY: I appreciate it.

MADDOW: Congratulations on the announcement today.

CONWAY: Do you agree? He`s your president, too.

MADDOW: Yes, we only have one president.

CONWAY: Thank you very much.

MADDOW: He`s, however, not the president yet.

CONWAY: That`s right.

MADDOW: That`s part of why I want to ask you about foreign policy
pronouncements because you have said – and you`ve been most clear on this
out of everybody in Trump world that you respect that President Obama is
still president. He`s president until noon on January 20th. Usually what
that means is that a president-elect would avoid trying to box in the
existing president, specifically on matters of foreign policy. The United
States has to speak with one voice on foreign policy.

In the transition that we have seen, Mr. Trump criticized and in some ways
undermined the one-China policy. We saw him today call on President Obama
to do a specific thing at the United Nations. We`ve now had this
announcement of what would be a very dramatic turn on nuclear weapons.

Isn`t he kind of cashing checks that President Obama has to cash?

CONWAY: No, look, this is him preparing to be president. He`s asked
constantly what his position is on X, Y or Z. And in the case of the
nuclear comment, I discussed it with him directly. And he is making the
point that this is about nuclear proliferation in the face of rogue nations
and regimes that are stockpiling weapons, it would seem.

And all he`s saying is, look, his first priority is to keep us all safe and
secure. His first doctrine is peace through strength. In a perfect world,
Rachel, we wouldn`t have any nuclear weapons. But it`s not a perfect
world. In fact, it`s a very dangerous world. And –

MADDOW: In proliferation, what do you –

CONWAY: Well, what he`s saying – I think all the president-elect is
saying is that we have to be able to be – to keep ourselves safe and
secure, and when others stop building their nuclear weapons, then we`ll
feel more secure in that regard.

MADDOW: Who is he talking about?

CONWAY: Well, he`s talking about anyone who fits the description of a
regime that would do us harm or a rogue nation.

MADDOW: Is there – is he – I mean, I`m asking you this not to try to
trap you on this, but in all seriousness, this is really a big deal. Is he
making a claim that there`s some new nation that`s a proliferation risk,
that nuclear weapons are being developed by a country that we don`t know
about, that we haven`t been talking about?

CONWAY: No, he`s not. But let`s fair, too, I don`t think the tweet was
groundbreaking in this regard. It seems that President Obama himself has
invested – has called for an upgrade in our capabilities. I read in one
or two articles up to $1 trillion is the price tag. So, we all, you know,
President Obama, President-elect Trump, everyone shares the same, I think,
core value and their first duty is to try to keep us all safe. And we know
it`s a dangerous world and that includes nuclear weapons.

MADDOW: When he says we have to expand our nuclear capability, does he –
I mean, does he mean more nuclear weapons? Because for decades, we haven`t
been creating – we haven`t been making nuclear weapons since George H.W.
Bush, as I`m sure you know. Is he talking about more nuclear weapons? Do
we need more than we have?

CONWAY: I think what the president-elect is really saying that it`s his
first obligation is to keep us safe and secure, and he believes in peace
through strength. He recognizes at the same time, Rachel, that other
people are nuclear capable. That`s not abating. It`s not like we`re going
to tell them, please stop doing that because we said so. And he wants us
to be prepared.

He makes very clear that this maybe a way for others to stop doing what
they`re doing.

MADDOW: Honestly, though, the American position on nuclear weapons
worldwide for a very long time now, not just as a partisan matter but over
multiple presidents, has been that we are trying to lead the way in
reducing the number of nuclear weapons in the world. He`s saying we`re
going to expand our nuclear capability.

CONWAY: He`s not necessarily saying that.

MADDOW: He did. He did literally say we need to expand our nuclear

CONWAY: What he`s saying is we need to expand our nuclear capability,
really our nuclear readiness or our capability to be ready for those who
also have nuclear weapons.

I mean, this is what happens. When you say that terrorism, particularly
ISIS, radicals or terrorists being contained, that are the jayvee team, we
don`t have to worry about them anymore and then people are being killed in
Nice, in Berlin this week, certainly in Orlando at the nightclub in May, in
San Bernardino a year ago, in Paris, in Brussels, it doesn`t ring true to
anybody that they`re not advancing. It doesn`t ring true to anybody –

MADDOW: What does that have to do with nuclear weapons?

CONWAY: I`m going to give you the analogy. That just saying it doesn`t
make it true. In others, us saying they`re contained and then attacking
proves that everybody who feels unsafe in a world where terrorists,
particularly in the case of ISIS are advancing, that they`re still wanting
to do them harm.

So, us – he`s trying to in his – I think in his quest to keep us safe and
secure, he`s putting the world on notice that he will do what he thinks he
needs to do to keep us safe and secure.

MADDOW: By expanding our nuclear capability. I mean –

CONWAY: He`s not trying to change a policy through Twitter.


CONWAY: He`s not trying to project what he will do as president.

What he`s merely saying is that this is a man who gets his intelligence
briefings regularly, the PDB, presidential daily briefing refers to a
product, but in addition to that which we know he received today or
yesterday or both, he also has other intelligence sources and he`s learning
many different facts that I`m not privy to. And this is one of the
responses that he felt compelled to give based on those facts.

MADDOW: Do you feel confident that the president-elect understands what
we`ve got for a nuclear arsenal right now?


MADDOW: Is he saying that we need more weapons on hair trigger alert, on
launch on warning status? Is he saying that we need more weapons – more
nuclear weapons in Europe? Is he saying that we need different kinds of
nuclear weapons?

I mean, as you know, there`s a nuclear triad. We`ve got three different
kinds of nuclear weapons. A lot of weapons experts, a lot of nuclear
experts say we need to get rid of one of those legs of the triad. Does he
agree with that? Or is this an announcement that we`re not getting rid of
that third leg of the triad?

CONWAY: He thinks that a nuclear triad is important to maintain. But I
just want to make very clear more broadly speaking, that he`s not calling
for any of the specific policies that you suggested/asked me. What he`s
merely saying is he wants us to be ready to defend ourselves and he`s not
making new policy. I mean –

MADDOW: This sounds like really new policy. On nuclear weapons, it`s
really a sensitive matter.

CONWAY: Well, of course, I would agree.

MADDOW: Who has the most nuclear weapons after us and Russia?

CONWAY: I don`t know. But I`m sure he does.

MADDOW: It`s France. India and Pakistan. One of the most important
things about – to know about India and Pakistan having nuclear weapons is
the number of nuclear weapons that they`ve got on launch status. Do you
guys talk about that? Like is that like –

CONWAY: Well, I don`t. He`s surrounded by national security team.

MADDOW: If the United States announces a U-turn on nuclear policy, India
and Pakistan don`t have any nuclear weapons on launch status. They could
move them to that status because a new nuclear arms race is about to start.

CONWAY: So, we`re getting ahead of ourselves, Rachel.

MADDOW: But that`s what happens in the past when presidents have made even
joking remarks about nuclear weapons. So, I think what I`m trying to get
at is a lot of people are hiding under the bed right now because he doesn`t
– it doesn`t seem like he knows what he`s talking about on this issue.

CONWAY: That`s not fair. It`s not fair.

MADDOW: Well, then, how can you make policy on Twitter and then say he`s
making policy?

CONWAY: He`s not making policy on Twitter.

MADDOW: Expanding our nuclear arsenal and announces it on Twitter is a big


CONWAY: He said our capability and again perhaps he is also echoing what
President Obama himself has tried to do here, which is get upgrades to our
nuclear systems. I saw in one or two or three reports to the tune of a
price tag of a trillion dollars. And – so, but again, he`s talking about
keeping us safe and secure.

In a perfect world, we wouldn`t be talking about nuclear weapons. It is
not a perfect world. It is a world in which this exists and it is a world
in which –

MADDOW: We need more?

CONWAY: No, he didn`t say necessarily.

MADDOW: Expanding our nuclear capability. OK, all right.

CONWAY: I just want to say this, in the world in which we live, which is
not perfect, in fact, it`s very dangerous and very uncertain, I hope we can
all agree – military might has been one of the ways to deter people from
doing bad things. Now, that can take on any number of different aspects,
but on this one, I think that we`re getting a little too far ahead of
ourselves that he`s changing policy and making policy in a way that he did
not intend.

MADDOW: OK. The president making policy happens whenever the president
speaks on a national security matter.

And I want to ask you about a couple of other national security personnel
decisions. On Election Day, the new national security adviser, Retired
General Michael Flynn, wrote an op-ed in which he argued that the United
States should extradite a guy who Turkey wants us to extradite. It now
appears that General Flynn`s company was being paid by the Turkish
government, and he did not disclose that in the op-ed, he did not disclose
that publicly when he was announced as an adviser to the campaign. He has
never talked about it in terms of being national security adviser.

I mean, I don`t have anything against General Flynn personally, but he was
being paid by a foreign government and advocating their policy positions in
the U.S. government while advising your candidate now the president-elect.

CONWAY: I heard you say it appears. Is that –

MADDOW: Well, he`s never – I mean, it`s been reported that he was – his
company was receiving money from the government of Turkey and people who –
as somebody who works in his company has confirmed that.

CONWAY: I have not discussed that with him. So, I would not be the right
person to ask to comment on that.

MADDOW: If he was on the payroll of a foreign government while advising
your candidate would that be disqualifying for him as national security

CONWAY: Not necessarily. I would need to know the facts. And, obviously,
that decision only lies with one person, the president-elect.

MADDOW: General Flynn during the campaign accused Hillary Clinton of being
involved in sex crimes against children.

CONWAY: You`re talking about a tweet?

MADDOW: Yes. He wrote this. It wasn`t a retweet.

CONWAY: Or fake news.

MADDOW: He wrote a tweet.

CONWAY: Is that the fake news story?

MADDOW: I mean, during the campaign, late in the campaign, said that
Hillary Clinton was involved in sex crimes with children.

CONWAY: But I think the source of that was a fake news report.

MADDOW: Right. But he tweeted it. He broadcast this.

CONWAY: I haven`t seen his Twitter feed. But I trust you.

MADDOW: He did. You can ask him, he did.

As national security adviser, it will be his judgment that the president
turns to in times of national security crises, no matter what they are.
His judgment is such that he did publicly accuse Hillary Clinton of being a
child rapist.


MADDOW: He did. He did.

CONWAY: That`s a little hyperbolic.

MADDOW: Well, sex crimes against children –


CONWAY: – fake news retweets myself. But –

MADDOW: It wasn`t a retweet. He said that everybody needed to check out
this news that Hillary Clinton was involved with sex crimes with children.

CONWAY: Rachel – I`m sorry.

MADDOW: So, if that`s his judgment – I can understand how he might be
involved at some level on the campaign, he might have things to offer –
why would a person with judgment like that be national security adviser?
Wouldn`t you want somebody who has rock solid instincts and judgment
particularly about public information to be in that kind of a key role?

CONWAY: But you`re conflating two things. You`re saying that – you`re
telling you`re audience, frankly, one negative thing about him and we`re
not looking at his overall credentials and his years in the national
security community, his tours of duty. I`ve talked to him about those
directly, his tours of duty, the three goals he has for the country as
national security adviser which include government reform, peace through
strength, a stabilization of the Middle East. I mean, these are his goals.
He`s got a full, long resume of very impressive national security skills
and accomplishments that I just can`t wash away based on a tweet.

And the other thing I just want to say –


MADDOW: You like run down somebody in a crosswalk. There`s no defense to
that, to say, like, look at all the other days, I had such a great driving
record. You know what I`m saying?


CONWAY: I disagree. It is not a perfect analogy.


MADDOW: No, it`s not a perfect analogy. But comment on the judgment that
it takes to have said something like that and never apologize for it?

CONWAY: If I may I would like to comment on the judgment of what we
currently have, my heart breaks every single day when I look at Aleppo.
Why? Well, because I`m a compassionate human being.

I can`t stand the fact, Rachel, that women are choosing suicide over rape.
I can`t stand the fact that you`ve got basically plurality is not a
majority of children under the age of 14 or so gone now either displaced or
dead and killed. And I look at that as a humanitarian crisis.

We`ve done next to nothing of value for 5 1/2 years. Where is the judgment
of our secretary of state? Where is the judgment of the administration?

We can`t just look the other way when things like this happen. That is not
me changing the subject. That`s me saying, if we talk about judgment,
let`s look at what a lack of judgment, a lack of action has wrought in some
hot spots around the world beginning with Aleppo.

MADDOW: In a complicated and dangerous world, I think that it`s reasonable
and I don`t think it`s – I think it`s almost inarguable that there`s at
least question if not concern that we`ve got a president who`s got no
governing experience, no foreign policy experience, no public service
experience, and that`s – you know, that`s an unprecedented thing, but
obviously he put that case to the American people and the American people
elected him. So, it`s settled but now –

CONWAY: That`s a big asset to them.


CONWAY: And, you know, President Obama had – he had been in the United
States Senate for practically a hot minute before he announced he would run
for president. He`d been a state senator but I think people liked that,
too. They liked the fact that they had somebody in 2008 and again in 2016
who arguably can look them in the eye, especially given who their opponents
were, and say, “I will go to Washington as your president owing nobody
anything. And I will work for you.”

It was a compelling argument for President Obama in 2008. It was a
compelling argument for Donald Trump in 2016.

MADDOW: On national security issues, you`ve got President-elect Trump,
though, without any national security or foreign policy or governing

You`ve also got a secretary of state who only has private sector
experience, no public service, no governing, no diplomacy experience.

You`ve got a national security adviser who phrased some of the questions
about – that I have about his judgment notwithstanding other impressive
things about his career, but there are some things that stick out like a
really big red flag in terms of him, and in terms of the other policy –
personnel decisions that have been announced.

I mean, Monica Crowley is someone I like very much from the cable news
world. I met her in green rooms like this, in studios like this. Monica
Crowley has just been announced as a deputy national security advisor,
possibly his spokesperson for the National Security Council.

CONWAY: She has a PhD in that field.

MADDOW: She also claims publicly – she has claimed publicly that Barack
Obama – President Obama is secretly not black. Barack Obama is not black,
yet this guy is campaigning as black and painting anybody who dares
criticize him as racist. I mean, that is the biggest con I`ve ever seen.

It`s one thing to talk like that in, you know, dummy cable news, this
environment or on – or on talk radio, which is where she made those
remarks. But how could you put somebody who has a record of saying things
like that as potentially the spokesperson or the deputy of the National
Security Council? Where – why aren`t there more serious people being
picked for these very critical roles on the most serious issue of all,
which is national security?

CONWAY: I have never heard that comment. I don`t even know what that
means, frankly. I heard you say it.

MADDOW: It`s amazing.

CONWAY: It`s – I don`t know what it means. But I know Monica. She`s
incredibly smart and incredibly thoughtful and deliberative in her work.
And you`re right, people say things on cable TV or talk radio sometimes
that I guess they would take back, that probably applies to everyone.


MADDOW: You guys have just given her an incredibly important national
security job.


CONWAY: She has a PhD. She worked with President Nixon on a number of
things. And the president-elect has faith in her to be somebody who can
effectively communicate what the National Security Council, the National
Security Agency is doing at a very fraught time.

And I do think you`re cherry-picking some appointments in that we`ve got –
we`ve been lauded by some of his naysayers and detractors as having put
together – he, not we. He`s put together an amazing cabinet of very
qualified men and women, people who have done great things in the private
and public sector and who are willing to share those experiences in the

And I would just say, you know, eight years ago at this time, I certainly -
- I don`t know about other people – but not critical of the cabinet that
was in formation because you want the new president, whoever the occupant
is, to be able to take his time and maybe one day her time to form that
cabinet in a way that helps – will help to execute on their agenda, on
their issue for the world and for the nation`s economy. And those who at
least are giving the president a wide – president-elect, excuse me, the
wide berth and the deep breath to do that, I think will be very impressed
with who he`s put there in some of these different positions.

MADDOW: Kellyanne Conway, stay right there.


MADDOW: You can`t leave.

CONWAY: You got it.

MADDOW: Kellyanne Conway, soon to be counselor to the president, first
ever Republican female campaign manager and the first woman to ever win a
presidential campaign. She`s here tonight for “The Interview”.

Stay with us.


MADDOW: Here`s some breaking news from “The Wall Street Journal”, just
published tonight. I`m going to read it straight off the lead out of “The
Wall Street Journal.”

Quote, “President-elect Donald Trump`s pick to run the Health and Human
Services Department traded more than $300,000 in shares of health-related
companies over the past four years while sponsoring and advocating
legislation that could potentially affect those companies` stocks.”

“Congressman Tom Price, a Georgia Republican, bought and sold stock in
about 40 health care, pharmaceutical and biomedical companies since 2012,
including a dozen in the current congressional session.” That`s according
to a “Wall Street Journal” review of hundreds of pages of stock trades.

“In the same two-year period, he sponsored nine and co-sponsored 35 health-
related bills in the House, his stock trades included Amgen, Bristol Meyers
Squibb, Eli Lilly, Pfizer and Aetna. Is largest single stock buy was
August of this year, between $50,000 and $100,000 in a biomedical firm
who`s largest shareholder is a congressman on the Trump transition team.
That stock has since doubled in price since he bought it in August.”

Joining us once again is the newly announced counselor to the president,
Trump campaign manager Kellyanne Conway.

Kellyanne, thank you again.

CONWAY: Thank you.

MADDOW: If the stock filings are accurate that “The Wall Street Journal”
is reporting on, your pick to head up Health and Human Services in the
cabinet was personally investing in companies while he was sponsoring
legislation that could affect their stock price. If these stock filings
are accurate, would that be a problem for you?

CONWAY: I really – I`m learning about that while I`m sitting here, so I`d
have to learn more information. I don`t even know what the rules are that
govern the ability of members of Congress to have stocks. I take t they`re
getting that information from information he has filed.


CONWAY: So, it`s not from lack of transparency or some furtive cover-up.
It`s actually information he`s filed. He`s put it all out there for
everyone to see, which, “A,” I appreciate as a private citizen.

But, B, I really – what I know about Tom Price, the congressman, in HHS
designee, is that he`s for free market, patient-centric health care, that
he`s voted to repeal and replace the Affordable Care Act many times because
he believes and he hears from many people that, you know, reducing our
quality and increasing our prices and reducing our choice and our access
was really not was intended for many Americans. Some have coverage, some
are very happy, many are not.

I`m sure you saw the polls just this week that show two real lenses about
the Affordable Care Act as part of President Obama`s legacy. You have
people saying – you have people saying, it was his greatest accomplishment
and people saying it was his greatest failure.

So, on this –


MADDOW: And another 6-point-something million people signing up in this
current enrolment period.

CONWAY: That`s right. I said that.

MADDOW: But if he`s got – if he`s got an ethics problem – I mean, if
what “The Wall Street Journal” is reporting is accurate and what they`re
reporting is not very complicated. He was trading in stock while
sponsoring legislation that could have affected the price of that stock.
Is that the kind of ethical problem that would pose an issue for him in
terms of being nominated?

I look at the Code of Ethics that was put out by the transition. A lot of
it is about, you know, whether or not people can be lobbyists after they
leave the administration and stuff like that way down the line, which will
have a very hard time enforcing when it comes to it. But something like
this, if he did this, if he was trading for his personal gain on
information that he had because he was a lawmaker –

CONWAY: But that doesn`t say that, in fairness.

MADDOW: Well –

CONWAY: But does it say it`s illegal?

MADDOW: Well, if it`s a violation of the Stock Act, then I mean,
presumably, there will be an investigation of that. But it wasn`t
technically illegal but he was still affecting a stock price through his
work as a congressman, and then buying that stock, that would be a problem,

CONWAY: You just gave the Democratic senators a good line of questioning
to ask in those hearings. I`m sure they will, Rachel. I`m sure they`re
watching you.

MADDOW: Well done. Well done.

Let me ask you something along the same lines. I`m not going to ask you
about the president-elect`s tax returns because that`s very well – but he
did release a financial disclosure form –

CONWAY: One hundred and four pages.

MADDOW: And in that financial disclosure, one of the lines of one of those
104 pages said that he had between $3 million and $15 million invested in a
hedge fund that has placed a particularly big aggressive bet that Fannie
Mae and Freddie Mac are going to be privatized.

So, he picks this treasury nominee last month. The day after he picks
Steve Mnuchin to be his treasury nominee, Mnuchin says, I want to privatize
Fannie Mae and Freddie Mac. And the stock goes through the roof.

If Donald Trump is invested in that hedge fund that took that big bet, he
just financially benefited to pretty significant amount with a multimillion
dollar investment from what his treasury nominee said.

CONWAY: Well, first of all, I don`t know if he has that investment.

MADDOW: Yes. And do – can we know that?

CONWAY: Well, I don`t know. Let me get back to you.


MADDOW: It`s important.

CONWAY: Because remember, he also has accountants and lawyers working
literally around the clock to making sure that what needs to be done for a
man who`s been so brilliant and so successful in business, unprecedented,
in modern times in our presidency, Rachel, is sufficiently disentangled for
him to take his job as president of the United States and focus on that 110

Secondly, I would expect the treasury secretary designee of a conservative
Republican president to say they would like to privatize Fannie and
Freddie. I don`t think that should strike anybody as brand new information
or tied to something that`s been –


MADDOW: It wouldn`t be controversial if we knew whether or not the
president was going – with every other president we`ve known, we`ve never
even had to ask. You just look up and check to see whether or not the
president had a financial entanglement where he would be personally
benefiting. The issue here is that we don`t know what Trump has.

I mean, “The New York Times” directly asked directly, asked the transition
does he still hold this particular investment which was directly affected
by this announcement the day after he announced them, and the answer was,
we are not releasing this information at this time. That would be easy
enough to announce.

CONWAY: No. The third thing I want to say about that, though, is that`s a
pretty small holding compared to everything that the man has –


MADDOW: $3 million to $15 million.

CONWAY: Well, it sounds like a lot of money to me and you, but the fact is
that it`s not a huge investment when you consider the idea that he would
pick Steve Mnuchin to be the treasury secretary and say, hey, while you`re
out there say you`d like to privatize Fannie and Freddie, an idea that many
conservatives have had for a very long time. That doesn`t seem to me to be
causal connection.

MADDOW: Should we not be concerned about any private financial gain he`s
going to have from any of his actions?

CONWAY: No, I didn`t say that. What I`m saying is, I think the
presumptive, you know, guilt, or the presumptive negativity –

MADDOW: It`s a question.

CONWAY: – not necessarily by you, but by others, it`s – it`s ubiquitous.
The other thing I just want to say is, a lot of the stock market seems to
like the fact that Donald Trump will be the president. It`s been booming.

MADDOW: Mazel tov.

CONWAY: You know, 20 percent – excuse me it`s up to 20,000, close to
20,000. It`s had, I don`t know, maybe a dozen or so gains in the days or
maybe more by now since he was elected president.

And, by the way, the opposite was predicted. First, it was that he can
never win, this is a joke, go home. He – there`s no map, there`s no path.
We heard it on this network and elsewhere.

And then the minute he got elected literally, he takes a call from
Secretary Clinton. She concedes, everyone concedes and congratulates him.
I was standing right there.

And the stock market likes it the next couple of days.

MADDOW: Yes, if you are going to short the expectations market, you`re
definitely going to win in this environment. We can give that advice to

But there is something unique going on here, in addition to you guys
winning and getting to brag about that.

CONWAY: We`re not bragging.

MADDOW: And rub the naysayers` noses in it and everything.


CONWAY: No, it`s really not. It`s honestly not that. Do I look like
somebody who rubs people`s noses in anything?

MADDOW: But let me – but when, government of Azerbaijan, they rent out
Trump Hotel Suites at the Trump Hotel in Washington, the president-elect
makes money from that. When his building project gets green lit by the
government in Buenos Aires, he makes money from that.

CONWAY: Well, his corporation does.

MADDOW: Yes, he`s the primary owner of his corporation. So, he`s – it`s
money for him. Anybody who wants to, any foreign country, anyone can –
they now have the option basically to pay money to the American president
by doing favors for this business that he owns.

CONWAY: By renting a hotel room?


CONWAY: I think that`s so attenuated. By the way, the money goes to the
corporation –

MADDOW: Small scale corruption is still corruption, right?

CONWAY: That`s not corruption.

MADDOW: I`m not – what I`m saying –

CONWAY: That is not corruption. That`s a hotel room.

MADDOW: But if you want to give money to the president, the American
president, we have never had a way to do that before. No foreign
government has had a way to do that before. The American people special
interests haven`t had a way to funnel money to the American president right


CONWAY: Nobody`s (ph) funneling money to him.

MADDOW: No, but you can through his businesses, as long as he still has a
business – as long as he still has an ownership stake in it.

CONWAY: He has said he will not be involved in his businesses when he
takes the oath of office.

MADDOW: But he will still benefit from their financial bottom line. And
so, anybody who affects that is in effect paying the president.

CONWAY: No, look, I disagree. And here`s why: two things quickly. One is
we`ve never had this situation before. It`s unprecedented. So, it is
difficult to get arms around.

MADDOW: We agree.

CONWAY: Usually, we have a politician moving from political office to
political office to political office, who just moved their lifetime
pensions and great health care along with them.

MADDOW: And their tax returns. It`s amazing.

CONWAY: Americans ended up not caring about that. They heard that. I
was, you know – that was –

MADDOW: Some of them are.

CONWAY: That question was vomited at me every single day by 50 people on
TV, and nobody cared.

MADDOW: Vomited?

CONWAY: That`s how much it was said. It`s like, his tax returns –

MADDOW: I asked you about it –

CONWAY: And nobody cared.



CONWAY: You`re right. Just sort of, you know, a metaphor.

But the American people didn`t care enough about that.

But, secondly, remember when the Trump Corporation benefits from a
financial transaction, please don`t lead people the impression that the
money goes into Donald Trump`s pocket. He employs tens of thousands of
people worldwide.

MADDOW: Hold on. Hold on. He`s the primary owner, he owns this
corporation. It`s not like people own a stock in it.

CONWAY: At the moment.

MADDOW: Is he going to give up ownership?

CONWAY: He has said he will do whatever is necessary to comply with the
law and the – comply with the law and the protocols –

MADDOW: He`s never said that he`s going to give up ownership. Are you
making news here?

CONWAY: No, I didn`t say that. I said he`ll do whatever is necessary to
comply with the law –

MADDOW: But as long as he owns it, any benefit goes to his business goes
to him.

CONWAY: Yes. But I mean, we`re presuming. OK, you said something that I
thought was remarkable, actually. A lot of things you say are frankly
remarkably brilliant and very well-prepared.

MADDOW: Thank you.

CONWAY: And the Democratic Party could use that these days. They`re on
identity crisis. But the fact is, Rachel, you just said that there`s never
been a president that a foreign country can funnel money. I was like,
ding, ding, ding.

We had a secretary of state that did exactly that and Americans didn`t like
that. She used the State Department as a concierge for foreign governments
to dump money into the foundation.


CONWAY: Her husband gets a million bucks over in Russia to give a speech.
She gives up 20 percent of our uranium rights.

I mean, this is –

MADDOW: You realize it was only yesterday they had to cancel the $500,000
hunting trip with the boys.

CONWAY: But guess what happens there?

MADDOW: You guys made such a huge issue about that with the Clinton

CONWAY: Not the same.

MADDOW: And right now, you have Ivanka sitting in on the meeting with the
Japanese prime minister while seeking –

CONWAY: Not the same.

MADDOW: – while seeking funding from a Japanese-owned bank. I mean –

CONWAY: The Softbank, the $50 billion?

MADDOW: No, nice try. No, I mean, the government-owned from which her
apparel deal she was seeking financing. She sits on that meeting with Abe.

CONWAY: But she didn`t discuss that with him.

MADDOW: But she`s there in the meeting. I mean, you`re talking – if you
guys were going to make an issue of pay to play, you have –

CONWAY: Where is it here? Show me where it is here, because it was
clearly on the mind of Americans about Hillary Clinton and the State
Department. That`s just obvious. That hurt here. They can blame Russian
hacking, they can blame Jim Comey, they can blame poor Bernie Sanders who
did a terrible thing of giving people another alternative and apparently
they wanted one because he won 22 states and over 13 million votes.

They can blame everyone they want to blame, the weather on Election Day.
But the fact is, people cannot get past that honesty and integrity and
veracity number that, the obstacle that she had and a lot of that was
embedded in –

MADDOW: You are not – no longer speaking for an active campaign.

CONWAY: No, no –

MADDOW: You`re speaking for a president-elect who has an unprecedented
problem on this – wait, you have to hold on for a second.

CONWAY: Unprecedented success.

MADDOW: Yes, entanglements.

All right. I have to do business right now. We`ll be right back.

Kellyanne Conway stays with us for just another moment. Stay with us.


MADDOW: We have one more segment to talk with Kellyanne Conway. She says
yea. We didn`t have to chain her to the desk. But we do have the zip
cuffs ready.

When we come back with Kellyanne Conway, I`m going to introduce her to one
of the people who I am most impressed with in this business, in the
business that I am in. And that introduction is right after this.

Stay with us.


MADDOW: This is an unrequited thing but I`m just going to say it. There
is a woman who I have always admired in this business who I never worked
with directly. Don`t know her personally. But from a distance, I always
thought she was really impressive, long stretches reporting from the war in
Bosnia, more than 25 reporting trips to Iraq starting with the initial
invasion of Iraq. One of the best Iraq reporters we`ve had of either

She was the first reporter to get the scoop when Abu Musab al Zarqawi was
killed. She also wrote an incredibly moving, incredibly well-reported book
on the battle for Sadr City in Baghdad and what that was like for the First
Cavalry Division fighting that house-to-house battle. And at the same
time, what it was like for the families of First Cav back home waiting for
news while they were in this incredible battle.

She`s the only American reporter to have reported in a combat mission from
an F-15 over Afghanistan. She`s just – again, she`s operating at a
totally different level in this business that I am. I`ve never worked with
her, but I`ve always admired her. She`s really been through it.

Kellyanne Conway is our guest right now for “The Interview”.

Kellyanne, I`m raising this issue right now because here is how your boss
has been talking about her in public.


DONALD TRUMP (R), PRESIDENT-ELECT: How about when a major anchor, who
hosted a debate, started crying when she realized that we won? How about


Tears. “No, tell me this isn`t true.”


MADDOW: We know from the number of time he`s told that story that he`s
talking about ABC`s Martha Raddatz there. Martha Raddatz did not in fact
cry on election night. She did not say, “No, tell me this isn`t true.”
There were no tears streaming down her face.

It`s wrong what he`s saying about her. But what I`m bothered by is the way
he`s singling her out, not just with wrong information but singling her

Is this how even a reporter like Martha Raddatz is going to be treated by
this president?

CONWAY: No, and I would have updates but they`re privately held. We`ve
been discussing this with ABC News. I talked to the president of ABC News
about this directly and I`ve talked to the president-elect.

Look, we all have enormous respect for Martha Raddatz as a journalist.
Everything you just said about her would get a plus one from me. And we do
have enormous respect for her and her colleagues at ABC news. Anybody who
watches just this past week the job she did sitting in for her colleague on
“This Week with George Stephanopoulos”, it was a tour de force in how you
interview people right, left and center about issues you know something

MADDOW: She`s among the best we`ve got in this country.

CONWAY: I completely agree with you. But I would like to broaden the
conversation if I may out in terms of –

MADDOW: Wait. Are we going to get an apology from the president-elect on
that? He`s telling a story about that that`s not true and telling it to
great effect and have people jeered her. Will he correct that?

CONWAY: So, apologies like that are not made publicly necessarily, but –

MADDOW: But the accusation was made publicly.

CONWAY: So, the accusation is made by a number of people. I`m just
telling you, I`ve got an update to what you presented there, it`s all –
I`ll say, and it would make you happy.

So, in terms of his relationship with the press, I mean, Rachel, I don`t
know how anybody can disagree with the just the empirically provable fact
that Donald Trump got more negative press coverage than anybody in modern
political history.

MADDOW: Also, quantifiably more press coverage than anybody in modern
political history.

CONWAY: Well, because people were trying to –

MADDOW: He was a phenomenon.


CONWAY: – the president.

Well, he`s a heck of a lot more interesting to cover, that`s true, than the
alternative. No doubt people wanted to cover him.

But – I mean, the negative press, the presumptive negative press and I`m
somebody who is very pro press, I am somebody who I think has good
relations with most of the press, the print and electronic media. But it
is frustrating oftentimes if you`re in Trump world to not be able to get
your message out, which is why he ended up taking it directly to the
American people.

We – people would ridicule us for doing these rallies, but it was his way
of being the master communicator, master connector he is, of making people
feel like they were part of his movement, not part of a garden variety
post-election (ph) campaign.

Let me just say, his way of cutting through the noise or cutting through
the silence on an issue, whatever the case was at a given time.

MADDOW: It`s on an issue like, just to stay specific to Martha Raddatz
here, he did say something publicly that isn`t true. And until he corrects
it publicly, the people will hear him say it will continue to believe an
untrue thing about a woman who doesn`t deserve it. I will just make that
case to you.

And I have one other thing on this to ask you about, which I don`t ever
think – I don`t think you`ve ever commented on. Peter Thiel`s part of the


MADDOW: He put a news organization out of business. He did not like how covered him in Silicon Valley. So, he funded a legal strategy
against them. They got sued for over $100 million.

It made that company go away. They no longer exist because Peter Thiel
sued them out of existence.

The lawyer he used to do that is now representing Melania Trump in a
lawsuit that she has filed against a blogger you`ve never heard of.

CONWAY: I heard of him.

MADDOW: A $150 million lawsuit against a blogger – is that going to
continue after inauguration? Is the Trump family going to try to sue to
bankrupt news outlets and bloggers?

CONWAY: That`s not the goal here. The goal here is to tell the truth, is
that Melania Trump –

MADDOW: To collect $150 million from that guy?

CONWAY: No, let`s be fair here. First of all, let me go back to what you
said about Peter Thiel. I don`t want anybody to leave here misinformed or
misled, that somehow he sued a company out of business. He filed a
lawsuit. The judge and jury heard all of the evidence. Gawker didn`t
settle. They may have –

MADDOW: Ask him why he did it. He said he did it to put –

CONWAY: But he succeeded.


CONWAY: And he succeeded with apparently an excellent lawyer who`s now
been hired by Mrs. Melania Trump who also has been slandered and maligned.
She has a right to defend herself. This woman is brilliant. Anybody who
mis – anybody underestimates her or misunderstands does so at their own
peril. I know her very well. She`s going to make an amazing first lady.

MADDOW: Is that lawsuit going to continue once she`s first lady?

CONWAY: I don`t know the course of the lawsuit. Meaning, I don`t what
it`s – where it is in the process right now, but she has the right to
defend herself.


MADDOW: This is a very unusual thing, though, what Peter Thiel did. It`s
a novel legal strategy. He`s the one who`s pioneered – he invented it.
He has pioneered it.

CONWAY: And he succeeded at it.

MADDOW: And he succeeded it.

CONWAY: With his lawyer.

MADDOW: And it made a journalistic enterprise disappear.

CONWAY: They made themselves disappear by –


MADDOW: Because they wrote a thing about Peter Thiel.

CONWAY: – and by not settling, and by being arrogant I guess going
forward. That`s my guess. That`s how the legal system works.

MADDOW: He accomplished what he set out to do. We both acknowledge.


CONWAY: The man`s an amazing success story.

MADDOW: But with the Gawker thing, he set out to fund that lawsuit to make
Gawker disappear, and it worked. Is the Trump family now embracing that

CONWAY: Not at all. Not at all.

MADDOW: But that is what she is doing.

CONWAY: Melania Trump – no, she`s defending herself. She got I think an
unusual if not unprecedented apology even though –

MADDOW: She got a retraction. And now, she`s still pressing ahead with
the lawsuit.


CONWAY: It`s unheard of. Well –

MADDOW: But why press the lawsuit after the retraction?

CONWAY: Why is it OK to treat her that way, Rachel?

MADDOW: Well, I`m not talking about her treatment. I`m talking about –

CONWAY: No, that`s what this is about, though. If you`re going to lie
about Melania Trump –

MADDOW: I also have no opinion on the Hulk Hogan sex tape. But I do have
an opinion on using a legal strategy, a novel legal strategy to disappear
journalistic enterprise.

CONWAY: That`s not what this is about. I think in her case, it`s a

MADDOW: Why use the same lawyer?

CONWAY: Because he`s effective. He did a great job.

MADDOW: He`s effective at this legal strategy.

CONWAY: That is one type of case that he handled. But that`s not the goal
here. The goal here is to, I think punish and to call out people who lie
about Melania Trump.

MADDOW: And a retraction isn`t enough. Even if you retract it, the first
family will continue to sue you?

CONWAY: It`s not the first family. Let`s be fair. She`s a private
citizen. She –

MADDOW: OK. So, the first lady of the United States, if you apologize,
you get it wrong. You apologize and you retract it, you will continue to
be sued, perhaps as an individual for over $100 million.

CONWAY: Let me ask you a question.

Do you think an apology –

MADDOW: That`s going to continue?

CONWAY: Well, hold on, Rachel. Do you think an apology and a retraction
undoes the damage? I think when humpty-dumpty falls off the damned wall –

MADDOW: And you guys are endorsing this strategy –

CONWAY: No, I didn`t say that. I`m asking a question. Why is it OK –

MADDOW: But you`re defending it.

CONWAY: I`m not defending it. I`m defending her and her right – her
right to sue people who spread lies and vicious lies about her.

MADDOW: If the Trump family believes that there are journalist –

CONWAY: How about people just start doing that? I found a great novel
strategy –


MADDOW: – every president, every president, not only in the modern era,
every president back to the beginning of news print has believed that the
press has lied about them and has hated the press and has inveighed against
the press. I have never seen a first family, never seen a president or his
family members trying to put newspapers out of business through a novel
legal strategy and I want to know if the Gawker legal strategy –

CONWAY: She`s not trying to do that. She`s not trying to do that. That
is not her lawsuit.


CONWAY: Her lawsuit is suing someone and suing a publication that lied
about her. And they –

MADDOW: Are they going to do that to everybody?

CONWAY: – issued a retraction and they apologized.

Well – are people going to stop lying about them? And she didn`t file
that lawsuit as the first lady. She filed the lawsuit as a private

MADDOW: Will it continue when she`s first lady?

CONWAY: Are people going to continue lying about her?

MADDOW: Well, presumably –

CONWAY: You`re engaged in hypothetical.

MADDOW: Presumably, the first family will continue to believe that people
are lying about them. All presidents do.

CONWAY: I know.


CONWAY: Do you know what we were discussing eight years ago around this
time, not you and me necessarily. But you and me several – do you know
what the country was discussing eight years ago? We weren`t discussing any
negative stuff associated with President-elect Obama. It was basically,
what will they wear to the inaugural? What will he try to push through?
How long will take to get healthcare? It`s just different for the Trumps,
and you know it.

But as a private citizen being lied about, I`m very proud of her. I`m
proud of her as someone who admires her, who knows her, and proud as a
woman who gets sick and tired of watching other women torn down in the
press, especially a public figure like that. I`m proud of her for pushing
forward with that lawsuit.

And she got a retraction. She got an apology. You`re asking me, is it
enough? Is the damage undone? Do you think you can`t pull up that story
somewhere? I bet you could pull it up right now on your computer. So, the
damage is always there and that`s not fair to her.

MADDOW: Are you glad that Gawker`s gone?

CONWAY: I haven`t made much attention to it. Am I glad that they`re gone?

MADDOW: So, if someone lies about the first family, you see it as a lie.
Would you want that news enterprise to be gone in punishment?

CONWAY: No, no. Of course not.

MADDOW: This conversation that we`ve just had will be taught in journalism


CONWAY: I`m looking at the time, I have a quick addendum to that. I
certainly don`t want them gone, but I also want the legal process to take
its regular course without interruption from anyone else.

So, if the lawsuit includes a judgment, if the verdict includes a judgment
that puts said Gawker out of business because they did not settle or they
did not protect their assets, or they didn`t – if that`s the result, that
wasn`t – that may not have been the intention. That`s the result.

MADDOW: That`s the intention.


CONWAY: The man is brilliant.


MADDOW: Kellyanne Conway –

CONWAY: Thanks for having me.

MADDOW: It`s really nice to have you here. I hope you will continue to do
this. And you told me last time we spoke that I get to speak with your
candidate during election.

CONWAY: He`s going to be watching now.

MADDOW: It didn`t happen. But you owe me one.

CONWAY: He wanted me to tell you, because I told him last week I was
coming on your show, and he said he was so happy, and when I talked to him
two days ago, he said, make sure you announce on your show that you`re
coming into the White House. He was very good. And I`m sure he`s

MADDOW: Congratulations on your new gig.

CONWAY: Thank you very much. I appreciate it.

MADDOW: We`re way over time. We`ll be right back. Sorry.


MADDOW: Where does the time go? I want to thank the Trump transition. I
want to thank Kellyanne Conway personally for agreeing to come in here and
talk to me. I cannot get a lot of Republican and Republican operatives,
let alone people involved in high-level Republican politics to have a
conversation with me.

I know everybody wants blood on the floor. A lot of what I want is to be
able to hash things out in person in a way that is civic, civil and
confrontational when it needs to be, without being mean, and I appreciate
Kellyanne Conway being willing to have that conversation with me.

Thank you.

That does it for us tonight.


Good evening, Lawrence.



Copyright 2016 CQ-Roll Call, Inc. All materials herein are protected by
United States copyright law and may not be reproduced, distributed,
transmitted, displayed, published or broadcast without the prior written
permission of CQ-Roll Call. You may not alter or remove any trademark,
copyright or other notice from copies of the content.>