The Rachel Maddow Show, Transcript 01/21/14

Guests: Rosalind Helderman, Matt Katz

JIM MOORE, BIG BEND STRATEGIES: -- what about me? It`s going to hurt his campaign. The more he attacks her this way, he`s going to run into trouble. CHRIS HAYES, "ALL IN" HOST: Krystal? UNIDENTIFIED FEMALE: I completely agree. I think especially going after the education piece, you know? She put herself through community college and graduated ahead of Texas Christian with the aid of scholarships. You know, by the time she was married, by the time she went to Harvard and had a husband who was willing to help. HAYES: That`s Jess (INAUDIBLE), Jim Moore from Big Bend Strategies, and Krystal Ball, who can you can catch here on "THE CYCLE," weekdays at 3:00 p.m. Eastern on MSNBC. That is "ALL IN" for this evening. THE RACHEL MADDOW SHOW starts now. Good evening, Rachel. RACHEL MADDOW, MSNBC HOST: Good evening, Chris. Thanks, my friend. And thanks to you at home. When it rains, it pours. Former Governor Bob McDonnell of Virginia and his wife, the first lady of Virginia, Maureen McDonnell, have today been indicted by federal prosecutors on more than a dozen felony charges. If they are convicted of those charges and they face the maximum penalties allowed by law, they could be looking at decades in jail and fines of over $1 million. This is a story that we have been covering from the very beginning. Our first coverage of this scandal was back in early April of last year. But, you know what, credit where credit is due on this one. The lion share of the reporting on this story has been done by the Virginia reporters working out of "The Washington Post", one of those key reporters is going to be here in just a moment to talk about this story, and also some key parts of the story were broken by "The Richmond Times-Dispatch". And those papers and those reporters deserve the credit for staying on this Bob McDonnell story in the face of months of denials and stonewalling by that government, and also, frankly, staying on this story in the face of the cynical, dismissal of this story by much of the national press corps, who too often swallow the made-up excuse from the governor`s defenders that Virginia law excuses this kind of behavior by public officials and that what the governor did was normal and that no prosecution effort would ever come out of this. Well, today, not only a prosecution, but a who were of a multi-count felony indictment has arrived in Virginia. And, again, "The Washington Post" was first with the story. And if you want to know where it started, it started with the chicken dinner. The catered chicken dinner at the wedding for one of Governor Bob McDonnell`s daughters, which was hosted at the governor`s mansion back in June of 2011. A June wedding is always a nice thing. A June wedding of the governor`s daughter is the kind of thing people love to hear about. And when the wedding is hosted at the absolutely lovely governor`s mansion in Richmond, Virginia, that is the kind of thing that`s going to get a lot of adoring attention. And as the glamorous photos from the wedding and from the lavish preparations for the wedding started to appear in the press, the governor`s office took pains to point out that the taxpayers of the commonwealth of Virginia were not going to be on the hook for this lavish wedding. They made it clear that the governor and his family were picking up the tab personally, even though it was happening at the governor`s mansion. Turns out that was not true. After inquiries from "The Washington Post," Governor Bob McDonnell`s spokesman revised that initial statement to say, actually, that Governor McDonnell was not paying for all of the expenses for his daughter`s wedding. She and her fiance, themselves, were picking up some of the cost. Specifically, the governor`s office said, the daughter and her fiance would be picking up the cost of the chicken dinner. Governor McDonnell did not pay for the catering. His daughter paid for the catering. And by his daughter paying for the catering, turns out what they actually meant was that the daughter accepted as a gift a payment from one of her father`s campaign contributors, which is what actually covered the cost of that very nice catered chicken dinner. It was weird, right? It was weird. It was or of a sign that maybe something was going on here that we didn`t expect. And that was the beginning of the reporting. That initial leak about the dinner we now know was provided by the executive chef from the governor`s mansion, who has been hired by Governor McDonnell and the first lady, but who eventually got into a dispute with them over their management of the mansion and the kitchen and their treatment of him as their chef. That dispute eventually devolved into the chef being convicted of two misdemeanor counts of embezzlement last fall. But the chef did not go down without a fight. When things started to go sour between him and the McDonnells, the chef later explained to "Washingtonian" magazine that he began documenting everything. He took cell phone pictures of anything he thought looked fishy. And he made sure to preserve, specifically, the check for the wedding catering, because the check for the wedding catering did not come from the McDonnells. Even though they were publicly claiming that they were covering the cost of everything at that wedding themselves, it wasn`t true. And that dispute between the McDonnells and the chef ultimately led to those misdemeanor charges against the chef. It also led to a string of embarrassing revelations about governor Bob McDonnell and his family, and specifically how they behaved with regard to the taxpayer-funded governor`s mansion in Virginia. A motion filed by the chef`s lawyers listed details about things that the governor and the first lady and their children had taken from the mansion for their own use -- bottled water, cups, Gatorade, protein powder, flats of eggs, liquor, taken not just by one of the McDonnell children, but also by her boyfriend, pots and pans that were taken out of the mansion kitchen by the first lady and given to the McDonnell children. That motion from the chef`s lawyers led ultimately to a Freedom of Information Act request from "The Washington Post," and then further very specific details on things the first family took for themselves, either directly out of the governor`s mansion or things they just bought for themselves on the mansion credit card. Things like, say, hummus, hint of lime tortilla chips, toilet paper, body wash, deodorant, dry cleaning, shoe repair, a detox cleanse of some kind, nasal spray. Something called sleep- inducing elixirs. Also dog vitamins. The dog, reportedly, is ginger. She`s adorable. She`s a sheltie/terrier mix and she needs vitamins. And the McDonnell family, reportedly, had the taxpayers of Virginia pay $9.49 in taxpayer money for the dog`s vitamins. Those revelations were embarrassing, and ultimately Governor McDonnell and his family repaid the state for the cost of the dog vitamins and some of the other stuff. But it turns out that that dispute with the chef and the improper spending that he narced them out for, that did not end up being the scandal. The scandal ended up being, specifically, about that check that the chef photocopied for the chicken dinner. And specifically the question of who that check came from. The chicken dinner was actually paid for by this guy, Johnny Williams, the CEO of a Virginia company called Star Scientific. Star scientific is convinced that it has unlocked the health benefits of tobacco. They invented an anti-inflammatory tobacco-based pill called Anatabloc. Star Scientific is based in Virginia. The CEO is a well-connected rich guy who`s also based in Virginia, and the CEO apparently decided that they were the key to success of Anatabloc. We know now that the company sought to have Anatabloc covered in the health plans of Virginia state employees. They sought state government support for research on the health benefits of Anatabloc and its active ingredients. The fact that they wanted those things for their own company and their own product, that`s not criminal. It`s not even irrational from the perspective of the tobacco pill company. But what the Justice Department now alleges in today`s complaint, today`s 43-page, 14-count complaint, what the Justice Department alleges is criminal here is what happened between that ambitious company CEO and Virginia Governor Bob McDonnell, because it turns out it wasn`t just the $15,000 chicken dinner that he paid for at the wedding. As documented in press reports over the last nine months and as alleged in the 43-page indictment today, the gifts and loans from Johnny Williams to Governor Bob McDonnell and his family, between the time Bob McDonnell was inaugurated. And last March, when it finally started to stop, when the McDonnell family finally had to start answering questions from law enforcement, the list of stuff that they took is just breathtaking. Tens of thousands of dollars of free flights on the CEO`s plane. That $15,000 catered chicken dinner at the governor`s daughter`s wedding. Another $10,000 for the wedding of the governor`s other daughter. Round- trip air travel for the governor`s daughters for a bachelorette party. A four-day vacation to Cape Cod, including a catered yacht, golf, a private cottage at the resort, and private jet travel to and from. A three-day vacation at a multi-million lake house, including a boat rented for their use during the stay, and a $190,000 white Ferrari for the governor to drive while he was there. Shopping sprees for the first lady in New York City, including one glorious day in April 2011, where the bill was allegedly $10,999 at Oscar de la Renta, more than $5,000 at Louis Vuitton, and more than $2,000 at Bergdorf Goodman, all in one day. More than $7,000 in golf, including greens fees and golf equipment and food and drink consumed on the golf course at an exclusive golf resort, to which the governor and his sons did not belong, but where they played frequently and put it all on the tab of that company`s CEO. A $6,500 Rolex watch for governor McDonnell, inscribed, quote, "71st governor of Virginia." A $50,000 check made out to Maureen McDonnell, the first lady. Another $70,000 in checks made out to a real estate company that Bob McDonnell operated with his sister. Not to mention tens of thousands of dollars more in campaign contributions, mostly in the form of free private jet travel for the governor. And while that is quite an amazing array of things for the governor and his family to have taken while the governor was in office, that, itself, is not necessarily a crime. I mean, there may be reporting requirements with regard to some of those gifts. There may be tax implications and banking implications there. But the sheer fact of having taken that much loot from one guy while you were governor, in Virginia, that wouldn`t be the sort of thing that would necessarily get you indicted on its own. That`s just the quid. What federal prosecutors are alleging is quid pro quo. What federal prosecutors say they can prove is the core allegation in this indictment, the core allegation of federal prosecutors that in exchange for the six-figure largess from the CEO of Star Scientific, Governor McDonnell and his wife, quote, "participated in a scheme to use Robert McDonnell`s official position as governor of Virginia to enrich the defendants and their family members, by soliciting and obtaining payments, loans, and gifts of other things of value from that CEO and his company in exchange for Governor McDonnell, and the office of the governor in Virginia, performing official actions to legitimatize, promote, and obtain research studies for the CEO`s products. So, we know the pile of loot that went one way from the CEO of that company to the governor and his family. We know what they got. This indictment today means that federal prosecutors think they can prove what went the other way. They think they can prove what the governor`s office did for that company and that it was an exchange for that loot. There`s a launch party for the company`s magic tobacco pill that was hosted at the governor`s mansion and attended by the governor and the first lady. There was the first lady of Virginia touting the magic tobacco pill at two events hosted by the company in Virginia and one in Michigan. It was a top-level meeting, set up by the governor`s office between the company CEO and top Virginia state health officials. No, make that two meetings set up by the governor and his wife with top Virginia state health officials and this company that had given them so much. It`s the governor smiling, holding up a bottle of that magic tobacco pill at a seminar set up in Richmond to convince doctors to recommend that magic pill to their patients. And if you want to see just a snapshot of the timeline here, and what led to these charges, the indictment itself is an amazing thing. This is from the indictment. From July 28th, 2011, through July 31st, governor and Mrs. McDonnell and their family enjoyed a private vacation at the CEO`s multi-million dollar vacation home at Smith Mountain Lake. Maureen McDonnell had previously called the CEO to ask whether his Ferrari would be at the house for Governor McDonnell to use. The CEO arranged to have a star scientific employee transport the Ferrari from Richmond to Smith Mountain Lake, so the defendants could use the Ferrari during their vacation. Then, check this out. On the last night of the vacation, at 7:47 p.m., Sunday night, Maureen McDonnell e-mailed a picture to the CEO, showing her husband, Governor Bob McDonnell, driving the Ferrari. Later that same night, 11:29 p.m., the governor himself sends an e- mail to the secretary of health for the state of Virginia, saying, I`d like you to have one of your deputies, in secretary felts` office, attend a briefing at the mansion, 10:00 a.m. tomorrow morning about this company, Star Scientific. The first lady will be there. That e-mail goes out at 11:29 p.m. on Sunday night after he spent the weekend driving this guy`s Ferrari around, while staying at guy`s multimillion-dollar lake house. The next morning, 10:00 a.m., the briefing happens with the Ferrari CEO there and the first lady there and the health secretary, indeed, sends his senior policy adviser. Nice work, if you can get it, right? The CEO pitches the case for his pill, says he has discussed this with Governor McDonnell personally. He suggests having Virginia state government employees use the drug as a control group in research studies. That same day, the CEO meets privately with the first lady. The first lady asks the CEO, hey, what brand of watch are you wearing? He says it`s a Rolex. She tells the CEO she would like to get one for Governor McDonnell, because he would like a Rolex, too. The CEO reportedly expresses concern about whether a senior government official like the governor of Virginia would want to be seen wearing such an ostentatious luxury item, Maureen McDonnell told the CEO that she wanted him to buy a Rolex for the governor. The CEO subsequently bought that Rolex for the governor, and at the first lady`s request, it was engraved, 71st governor of Virginia. And that was, according to the indictment, all in one day`s work. The indictment alleges that all of that, from the photo of him in the Ferrari to "here`s what I want the inscription to be on the Rolex," the indictment alleges that that all happened between Sunday night, July 31st, and the next day, Monday, August 1st. Today, it was announced that the Senator Mike Lee will get the Tea Party response this year to the State of the Union address by President Obama. We still don`t know who`s going to give the Republican Party response, but the Tea Party response will be by Mike Lee. For four straight years now, there have been separate Republican Party and Tea Party responses to the State of the Union. And while that has been kind of a weird strategy for Republicans overall, you know, the official Republican Party responses have gone pretty poorly on their own, even without the competition from their own side, with these Tea Party addresses. I mean, Bobby Jindal, forgive me, bombed in his response to the point where it`s still being parodied. Marco Rubio and the big water reach, Marco Rubio also bombed in his State of the Union response. Mitch Daniels looks like he just popped the top off his coffin long enough to let the bats fly out before he delivered his run for your lives State of the Union message. The Republican responses and the Tea Party responses in the State of the Union have generally been terrible in the Obama era. But not Bob McDonnell`s, not when he did it. When Bob McDonnell did it, he nailed it. (BEGIN VIDEO CLIP) THEN-GOV. BOB MCDONNELL (R), VIRGINIA: Good evening. I`m Bob McDonnell. 11 days ago, I was honored to be sworn in as the 71st governor of Virginia. (END VIDEO CLIP) MADDOW: Eleven days in. Bob McDonnell seemed like a rising star for so many years, in part because he carried himself perfectly. He carried himself like a president. Yes, sure, maybe if you`re paying attention, you`d know that he`s a president who might force you to have a medically unnecessary vaginal ultrasound probe, but, still. "The Washington Post" reported in December that the U.S. attorney was ready to levy these charges against Bob and Maureen McDonnell, while the governor was still in office in December, and that would have made him the first sitting Virginia governor to be criminally indicted ever in the history of that state. Federal Justice Department officials in Washington reportedly intervened and told prosecutors to delay bringing those charges. Delay the charges until after the gubernatorial transition had taken place in Virginia, which it did, just 11 days ago. So, 11 days after he was inaugurated, he gave the State of the Union response and everybody said he was going to be the next Republican process. Eleven days after he left office, 14 felony charges, decades possible in prison, $1 million in fines, possible, if he`s convicted. Today, Governor Bob McDonnell denied these charges vigorously. He said they were a manifestation of overreach by the federal government. (BEGIN VIDEO CLIP) MCDONNELL: Good evening. I am here with my wife, Maureen, and my daughter, Cailin, and my son-in-law, Chris, and I really appreciate this opportunity to address the people of Virginia here tonight. I come before you this evening as someone who has been falsely and wrongfully accused and whose public service has been wrongfully attacked. I did nothing illegal for Mr. Williams in exchange for what I believe was his personal friendship and his generosity. I will use every available resource and advocate that I have for as long as it takes to fight and prevail against these false allegations and the unjust overreach of the federal government. There`s no way for me to fully convey how much I appreciate the ongoing steadfast support and encouragement that I have received over the many months, including today, from family, from friends, and from people who I have worked with for 37 years in public life. So I thank them tonight, in giving me the support during the most difficult and unexpected ordeal of my life. My family and I are most grateful. (END VIDEO CLIP) MADDOW: If these charges are proven, Governor Bob McDonnell is looking potentially at decades in prison and more than $1 million in fines. But, just one last note here on the perspective. Bob McDonnell was inaugurated governor of Virginia four years ago this month. The two American governors who were first inaugurated four years ago this month, the only two governors who were first elected in that unusual off year election year in 2009, the two governors were Bob McDonnell of Virginia and Chris Christie, the governor of New Jersey. They were the only two this year, bumper crop. Joining us now is Rosalind Helderman, political reporter for "The Washington Post." Ms. Helderman, thanks very much for being here. It`s a real pleasure to have you here. ROSALIND HELDERMAN, THE WASHINGTON POST: Thanks so much for having me. MADDOW: So you have been covering this intensively right from the very start. I have to ask you if in trying to sum it up that way, if I -- if you hear anything that I`ve gotten wrong or if this sounds basically in keeping with your understanding. HELDERMAN: I think you`ve basically got it. MADDOW: OK, thanks. Was there anything in the actual indictment that you were not expecting based on your reporting thus far? HELDERMAN: You know, I think the indictment added a lot of nuance and a lot of details to a tale that we have unfolded pretty thoroughly over the last few months. I think one thing that surprised me and maybe a lot of other people is just how strong the indictment is. We`ve heard from the governor, for many months now, that he did nothing illegal, as he said again today. And I think many people in Virginia were expected if there was an indictment, it might feel sort of like a slap on the wrist indictment. And that`s not what we got. We saw 14 felony counts for both the governor and the first lady. As you say, they face decades in prison. This is a very strong indictment. MADDOW: State governors ending up in hot water is not terribly uncommon in our country, sadly. But it`s very uncommon in Virginia. This kind of thing is a first for Virginia, which has really prided itself on relatively uncorrupt government and relatively scandal-free executive leadership. Is that an important factor for this prosecution, for its political import, for its chances of success? HELDERMAN: You know, that`s an interesting question. You`re right. People refer to Virginia what they call the Virginia way. It`s a sort of sense that people go into elected office out of a gentlemanly sense of public service. And that people just don`t do this kind of thing in Virginia. It`s not New Jersey. It`s not Illinois. And they will be choosing jurors who likely have that impression of the state. And so, whether that means they`re more likely to give the governor the benefit of the doubt, because they like him and they think of him in that way, or if that means that, you know, they`re shocked by this, and more likely to hold them accountable. We`ll just have to see. MADDOW: Rosalind, can you tell prosecute indictment who has been cooperating with prosecutors in terms of them building this case? There`s a few people who are referred to by their initials, Johnny Williams, the Star Scientific CEO, is obviously one of them. Are there other people who are referred to in this case, or who obliquely turn up that you can tell have been cooperating? HELDERMAN: It`s pretty clear that the governor`s staff has been interviewed. I don`t know that they`ve been interviewed very happily, but some of them obviously offered some accounts that the government found useful. The same is true, I think, of staff to the first lady. I don`t think it`s quite fair to say that the indictment shows that they`ve turned on them or anything like that. But just that they offered sort of honest feelings about what occurred and the government might have found those answers useful. Although it is interesting that the defense has already come out very strongly swinging and saying that not only are they going to question the credibility of Mr. Williams, which I think everyone was expecting, but also another witness, who`s referred to only by her initials, the first lady`s chief of staff. They`re going to be questioning her credibility as well. MADDOW: Wow. Wow. Amazing stuff. Rosalind Helderman, groundbreaking reporter on this story for "The Washington Post." You`ve been very much ahead of the pack, you and your colleagues at "The Post", all along, in covering this story. Congratulations on having led on this story that now everybody else is catching up to. It`s good to have you here. HELDERMAN: Thank you. I appreciate it. MADDOW: Thank you. All right, we`ve got lots more ahead, including another eventful day for the other Republican governor elected in 2009, New Jersey`s Chris Christie. There`s a lot to get to tonight. (COMMERCIAL BREAK) MADDOW: One of the things about a criminal indictment is that you get a lot of specifics. So, for example, in the Bob McDonnell corruption scandal in Virginia, there`s been a lot of reporting over the last nine months or so about the kinds of gifts that the governor and his family took from the CEO of the Virginia company who figured in the scandal. Before today, though, before the actual indictment came out, including this forfeiture list of items that Governor McDonnell and his wife will be expected to hand over if they are convicted, this forfeiture list, we`ve never had this kind of detail about what they took. But now we know, if convicted, they will have to hand over the sum of not less than $140,805.46. Also, black Rebecca Minkoff shoes, a black Louis Vuitton shoes, white Louis Vuitton shoes, a cream Louis Vuitton purse, a cream Louis Vuitton wallet, a silver Rolex watch, engraved with "71st governor of Virginia," a yellow Peter Sam (ph) dress, a blue Armani jacket, and two matching dresses, two gold Oscar de la Renta dresses, a black Louis Vuitton raincoat, a gold Oscar de la Renta sweater, one pair of Emilio Rose earrings, one gear sweatshirt, two pairs of Footjoy golf shoes, one button down Ralph Lauren shirt, one white Peter Miller golf shirt, one baby blue striped Peter Miller golf shirt, one royal blue Peter Miller golf shirt, one aqua fairway green tech golf shirt, one white striped Ralph Lauren golf shirt, one ping University of Virginia golf bag, one ping Kinloch golf bag, one Sun Mountain Notre Dame golf bag, two sets of golf clubs, one Heather McKenzie watercolor and frame, two iPhones, and 30 boxes of Anatabloc. All of which the governor and his wife and family reportedly took as gifts from the CEO of the company that makes Anatabloc. Joining us now to discuss this 14-count felony indictment and the prospects for this corruption prosecution is Kendall Coffey. Mr. Kendall is a former U.S. attorney and he`s now an NBC News legal analyst. Kendall Coffey, thanks very much for being with us. KENDALL COFFEY, NBC NEWS LEGAL ANALYST: Hey. Thanks for inviting me. MADDOW: So there are charges here about false statements and obstructing the inquiry, essentially charges related to the cover-up and trying to evade justice. But it seems to me like the core charges here are basically bribery. Is that correct when you look at this indictment? COFFEY: It doesn`t use the word bribery, but what it`s really saying is, there was an ongoing scheme to extract all kinds of personal benefits. In effect, close to $140,000 in largely cash items -- the rather intriguing list of consumer items that you just detailed, in order to get favorable treatment from the governor`s office. And it`s sufficiently specific in terms of the kind of favorable treatment that was sought, so that I think that the federal prosecutors can make out successful charges, even though the defense is going to argue, you have to have more of a specific quid pro quo here. It isn`t like the governor was going to veto or not veto legislation or sign some particular bill based on your enticements. It was more of having a strategic relation in getting help, perhaps with a couple of study probes that the private vendor wanted to get the governor`s assistance on. MADDOW: The governor`s response today was that this whole prosecution, he said, was based on a novel legal theory and that nobody has ever been prosecuted for this sort of thing before. What do you make of that line of defense from Governor McDonnell? COFFEY: There`s nothing novel about this. When someone in public office tries to turn a private party into, effectively, an ATM machine, which is what the government`s alleged here, in order to get all kinds of personal benefits, golfing trips, family vacations, cash advances, loans, whatever you want to call them, $120,000, there`s nothing novel about that. If the government can prove it, it`s a crime. And the government has got multiple theories that are tried and true and tested in other corruption cases. MADDOW: It sounds like you think this is a strong indictment. I just interviewed Rosalind Helderman from "The Washington Post", who`s been one of the leading reporters on this. She said, just as a journalist, one of the things she was surprised by, by the indictment, is that it does seem like a strong indictment, at least from a layman`s perspective. It seems like that`s your view, too. COFFEY: Yes. It`s very, very detailed and we`ve got e-mails where the former first lady was basically saying, we`re broke. You`ve got to come through and help me get some money here. And a couple of the elements that I think would create additional strength in front of the jury are the fact that the governor, who was a former attorney general, he had to know about where the line was and where the line wasn`t, for example, the indictment alleges that he failed to disclose substantial loans on financial applications. Maybe some people can say I forgot, but I`m not so sure that`s something a former attorney general can get away with. The other thing about this that really creates sizzle and spice with a jury, from a prosecution`s standpoint, is the list you were sharing with your viewers. When you`re talking about Louis Vuitton, when you`re talking about Rolex, when you`re talking about Armani, those kind of things that might have a juror that`s going into the case with an open mind. All of a sudden, when they hear about things that seem like extravagant greed, things that they could never hope to own, all of a sudden, you`ll see their reaction, right in the courtroom. They`ll start to look differently at everything about the case. So, the government`s got plenty of specifics. And I think the right kind of elements that give this a powerful force in a courtroom. MADDOW: Kendall Coffey, former U.S. attorney and NBC News legal analyst now, thank you very much for joining us tonight and helping us understand it. I appreciate it. COFFEY: Thanks, Rachel. MADDOW: I will say, just because I have been marinating in this indictment since it came out this afternoon, I`ve got to say, bribery does appear. Counts 2 through 4, defendants, Robert F. McDonnell, Maureen McDonnell, and others, known and unknown to the grand jury, knowingly and intentionally, having devised and intended to devise a scheme and artifice to defraud the citizens of Virginia of their right to the honest services of the governor of Virginia through bribery. Also, the word "extortion" is in there two pages later. This is absolutely -- this has been a scandalous story from the beginning, but the detail that is in this indictment is, I`ve got to admit, even for just a layman, it`s almost mind bending. I almost can`t believe this isn`t a move. All right. Also, today was Governor Chris Christie`s inauguration day in New Jersey. And lots of activity surrounding that governor`s bridge scandal managed to transpire today, despite this other scandal and despite the inauguration and despite the huge snowstorm that is socking the East Coast in the face as I speak. Lots ahead. Stay with us. (COMMERCIAL BREAK) MADDOW: In the middle of all the intense political news today and the giant snowstorm hitting the East Coast, today was also Election Day. Today was the day that Virginians of all the beleaguered folks in the country, Virginians not only had to absorb the news of the criminal indictment of their most recent governor today, but people in Northern Virginia also had to go to the polls the today in a special election for a race that may end up determining which party controls the Senate in that state. Control of the Senate will not be sure in Virginia until one other race goes through a recount, but this one tonight is just as crucial to that outcome. Polls closed at 7:00 p.m. in the special election for the 33rd Senate district in northern Virginia. And now with 100 percent of precincts reporting, "The Associated Press" has declared the Democrat in the race, Jennifer Wexton, to be the winner, with 52.7 percent of the vote. She`s a pro-choice, pro-gun reform Northern Virginia Democrat who defeated both a Republican in the race named John Whitbeck, and a Republican named Joe May, who ran a strong campaign in this race as an independent. Jennifer Wexton`s win tonight means that control over the Virginia Senate hinges now on the results of a recount that`s going on in the other special Senate election in Virginia, Virginia`s District 6. The stakes on that recount are now officially very high. If the Democrat wins that recount, Democrats control the Senate in Virginia. If the Republicans win that recount, they control the Senate. Big deal. Watch this space. (COMMERCIAL BREAK) MADDOW: Late on Thursday night, this past Thursday night, an emergency conference call was convened in the great state of New Jersey. The conference call was hosted by this man, Todd Christie. You can see the family resemblance there. Todd Christie, you can tell, is the brother of New Jersey Governor Chris Christie. Now, on this conference call, Todd Christie made a direct appeal for last-minute cash to pay for Governor Christie`s upcoming inauguration festivities, including a day-long party ending on Ellis Island. That choice of venue was supposed to make Chris Christie`s inauguration for his second term into a big, high-profile, all-American affair, not incidentally highlighting what Governor Christie wants to be his own bipartisan appeal on the issue of immigration. Hence, Ellis Island. But with just days to go before that big party, Governor Christie`s allies found themselves short on cash for the party. The governor`s brother, Todd, convened that conference call with some of the governor`s most loyal, big-money donors. And then according to "The New York Times," quote, the governor himself got on the line, trying to convince his listeners that he was moving beyond the George Washington Bridge scandal and getting back to work. That was Thursday night. Governor Chris Christie trying to reassure his most loyal donors that the bridge scandal was totally behind him, and they should pony up big bucks for his inauguration party. That was Thursday night. Then, Friday morning happened. Quote, "The next day, state investigators sent 20 subpoenas to Chris Christie`s inner circle, as the inquiry into the bridge scandal widened." Stick with me, big money guys, this is all behind me, I swear. Pay no attention to the subpoena. Today was inauguration day in New Jersey for Chris Christie, because the news gods, as always, have an impeccable sense of timing. Leading up to today`s festivities, most of the coverage was about how little interest there was in celebrating the start of Chris Christie`s second term, given what else is going on for him. The governor himself had to get on the phone just a few nights before his big payday to beg for money to pay for the events. Inauguration organizers had a surplus of tickets they were desperately trying to give away, even on the eve of the event. One leading New Jersey Republican told "The Wall Street Journal," quote, "They are having a hard time filling the spaces." A dinner for the governor that was scheduled to be held tonight in Jersey City abruptly got called off. It was canceled early last week because of a reported lack of response. People are just not buying tickets for it. And then, there was the big, all-American inauguration party on Ellis Island. Well, that also was cancelled. Arguably the good news for Chris Christie today was this massive snowstorm that has slammed into the Northeast. The snowstorm makes it a totally normal apolitical decision to cancel some of the festivities just on account of lousy weather. The bad news for Chris Christie is that on the day of his inauguration, the day that was supposed to be his big victory lap after cruising to re-election, today, the New Jersey state legislature decided to finally get its house in order in terms of their investigation into the ongoing bridge scandal. Last night on this show, you`ll remember we spoke to Democratic state legislature, John Wisniewski. As of last night, he was the chair of the New Jersey assembly`s select committee on investigation. In addition to his committee in the assembly, the New Jersey Senate had also formed its own committee looking into the bridge scandal, each chamber of the New Jersey legislature, operating its own investigation. Awkward, right? Today that awkwardness ceased. Today, New Jersey legislative leaders announced that instead of having two committees looking into this incident at once, stepping on each other`s toes and getting in each other`s ways, they are going to combine forces and create one joint committee made up of members of the state assembly and the state senate. It will be eight Democrats and four Republicans, because Democrats have the majority in both of those bodies. Now, as a practical matter, this is a big development. In terms of the legislative inquiry into potential wrongdoing here, this is now going to be a combined effort, not two parallel investigations proceeding on different tracks, and as I said, maybe getting in each other`s way. This decision also settles the question of whether or not the legislature, and by extension, New Jersey`s taxpayers, are going to be paying for more than one expensive lawyer to help advance this investigation. We now know the answer to that. It`s the hot shot former federal prosecutor who helped bring down Governor Rod Blagojevich in Illinois, the guy who the state assembly has already hired. He is going to be the main special council for the whole legislature. There`s not going to be a second special counsel brought in, as had been previously expected. So this decision today about combing the committees, that settles that question about who`s in charge and who`s the special counsel? But it also raises a few more questions. The state assembly last week, that`s the group that sent out 20 subpoenas in this case, to a long list of people believed to be involved, in some way, in the bridge scandal. The state Senate hasn`t yet sent out any subpoenas, but the chair of the Senate side did say last week that there were three people who she named, as people who she intended to subpoena. Two of those people, the chairman of the Port Authority, David Samson, and Chris Christie`s incoming chief of staff, Regina Egea, they were among the 20 people who got subpoenas from the state assembly anyway. But the third one the senate named, a Port Authority commissioner named Pat Schuber, he didn`t get a subpoena from the assembly. Is he now going to get one now that the investigations are combined? The assembly didn`t want to talk to them. The Senate said they did. Now that the Assembly and the Senate are together now, does he get a subpoena? We don`t know. So that`s one question. Here`s another question. Last week, when the New Jersey legislature voted to form these committees, that vote was unanimous in both chambers. Every Republican in the assembly and every Republican in Senate voted for it along with every Democrat. Since then, however, a number of high-ranking Republicans have decided they are against the New Jersey legislature investigating the scandal, because now they say it has become partisan, a partisan investigation, even though they voted for it just last week. While establishing this new joint committee will require a new vote in the legislature. Will the Republicans still vote for it? Will that give those Republicans who are now saying they`re against this investigation a chance to jump-ship and try to kill the investigation, or at least turn it into an all-Democrat affair, instead of the previous bipartisan, unanimously improved investigation that we had as of -- well, today. Hold that thought. Joining us next is somebody who knows these things. Stay with us. (COMMERCIAL BREAK) (BEGIN VIDEO CLIP) VAN JONES, CNN: You ran for governor. You know the importance of the Republican Governors Association. Chris Christie is now in charge of that. Do you think it`s fair for him to stay in that role, that key role for your party? KEN CUCCINELLI (R), FORMER VA ATTY. GENERAL: I think just from the perspective of setting aside this as an issue in other races, it makes sense for him to step aside in that role. He does not serve the goals of that organization by staying as chairman. NEWT GINGRICH, CNN: Let me ask you -- CUCCINELLI: And that doesn`t mean any of the charges, political or otherwise, are substantive or not. It doesn`t matter. Perception is reality. (END VIDEO CLIP) MADDOW: That was Ken Cuccinelli, who was Virginia`s attorney general, and the failed Republican nominee to succeed Governor Bob McDonnell in Virginia. Governor Bob McDonnell indicted today on 14 federal felony charges. Governor McDonnell, first elected governor in 2009, same time as New Jersey Governor Chris Christie was first elected. And it`s New Jersey Governor Chris Christie that Ken Cuccinelli said tonight should step down as the chairman of the Republican Governors Association because of the scandal surrounding him. Got it? Yes. It`s hard to keep track at this point. Joining us now is Matt Katz. He`s a reporter for WNYC, who`s been covering Chris Christie and the New Jersey bridge scandal extensively. Mr. Katz, thanks very much for being here. MATT KATZ, WNYC: Sure thing, Rachel. MADDOW: So, the big substantive development today in the New Jersey story is that the Senate and the assembly are joining forces, they are merging their two investigations. What are the implications of that? KATZ: Yes, this is a big deal. The Democrats were somewhat embarrassed by the fact that they had these dueling committees issues two subpoenas. So they did themselves a favor by finally coming to an agreement on this. What it does is, the governor, remember, he said he was going to cooperate with all appropriate inquiries in this regard. Now, they`ve taken away one opportunity, one potentially legal opportunity he would have had to complain about these two committees and to go to a judge and say these are -- this is over-burdensome. And I couldn`t possibly respond to two committees or my people shouldn`t be forced to respond to two sets of subpoenas. So, they` taken that away from the governor now and they can form a unified committee with one message. I mean, you can just imagine media even separating themselves to go to two committee hearings going on at the same time. This was something they had to do and interestingly enough, they announced it within minutes of Governor Christie`s inauguration today. I mean, I was at the inauguration across the street from the state house waiting for it to begin, listening to a children`s choir while the Democrats announced it across the street at a press conference. So, their timing was also interesting. It was a little comeuppance there. MADDOW: Matt, let me ask you about that scene actually, because one of the worries, one of the concrete worries about there being two committees was David Samson, chairman of the Port Authority, an absolutely key figure in this scandal. Loretta Weinberg in the Senate has said, I intend to subpoena him from the Senate side. The assembly did subpoena him. There was this question that he would have dueling subpoenas from two sides, maybe that would be a way to fight both of them. David Samson reportedly was there, not only just at the inauguration today, but on stage with the governor? Did you see that? KATZ: I did. It`s -- it was pretty amazing. He`s on stage, Loretta Weinberg is on stage. John Wisniewski, who`s the assembly lead interrogator, they`re all on stage. It was incredible. I mean, the governor did not mention bridgegate once. He didn`t even really allude to it, but it was hanging thick in the air because of the people who were there, like David Samson who`s the only link really between the two scandals going on, the alleged scandals going on, bridgegate and the situation in Hoboken. He`s there and his interrogators were there. And then, of course, it was noticeable for the people that weren`t there like Bridget Kelly, who would have a seat on the stage today. But, of course, she`s lost her job in this whole situation. MADDOW: Matt Katz, reporter for WNYC, who`s been all over this story. Matt, thank you for helping us understand this remarkable scene today. I appreciate you being here today. KATZ: You got it, Rachel. MADDOW: All right. We`ll right back. We have an important correction you may enjoy. Stay with us. (COMMERCIAL BREAK) MADDOW: I`m sorry. Earlier in the show, I said the two governors who were elected in 2009 were Bob McDonnell, who, of course, has just been indicted by federal prosecutors on bribery charges, and Chris Christie, who has well-documented ongoing problems in New Jersey, including federal prosecutors looking into him there, too. Turns out I was wrong. There was a third governor elected in that off-off year of 2009. It was the governor of the commonwealth of Northern Mariana Islands. Remember the Jake Abramoff`s scandal? In 2009, the people of the Northern Mariana Islands reelected Jack Abramoff`s one time ally Ben Fitial to the governorship. That was 2009. Within four years, Governor Fitial became the first governor of any U.S. territory to be impeached. Among the allegations was that he ordered a prisoner to be released from prison specifically so that prisoner could give him a massage. See, his personal masseuse was in prison and he wanted a massage, so he ordered that the guy be sprung out of prison. Seriously. Also, the governor was accused of using port police to help the then- attorney general flee the island to evade his own criminal charges. So, using the cops as the getaway car to help your buddy go on the lam, that will generally get the governor in trouble, no matter where you govern. He got impeached by the House in the Northern Marianas and then Governor Fitial resigned last year before the Northern Marianas Senate got a crack at him. But when I said earlier there were two governors elected in `09, there were, in fact, three. The one who got indicted today, the one whose administration is under intensive investigation in New Jersey, and the prison-freeing, massage-getting, aiding and abetting, Ben Fitial of the Northern Marianas Islands. I`m sorry. I forgot. 2009 was a bang-up year for governors, yes? Now, it`s time for "THE LAST WORD WITH LAWRENCE O`DONNELL". Have a great night. Massage! THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED. END