The Rachel Maddow Show, Transcript 05/07/14

Guests: Dave Helling

RACHEL MADDOW, MSNBC HOST: And thanks to you at home for staying with us on this fantastic night. In the year 2008, the great state of Missouri got rid of its limits on campaign contributions. They said anyone could give any amount for candidates and election issues in that state. And when Missouri made that issue in 2008, they got -- drum roll, please -- they got their own Missouri version of the Koch brothers or their own Sheldon Adelson, their own Art Pope. Once Missouri said, anybody could spend anything they wanted on Missouri politics, they got their own homegrown Missouri zillionaire who thought the policies of the whole s state should be remade in his own image. And this is a new species in American politics, right? Since we started getting rid of all the campaign finance rules. We`ve got these zillionaire guys, all of the country, a lot of them operating in national politics, some of them operating in just their home state. But the one that Missouri got, he turns out to be a doozy. (BEGIN VIDEO CLIP) REX SINQUEFIELD, RETIRED FINANCIAL EXECUTIVE: You know what, there was a column written, and I hope I don`t offend anyone, but a published column who was a farmer judge in Missouri. He now owns and writes for a newspaper in central Missouri called the un-terrified Democrat. What a name. And it`s is Osage County, Missouri. And he starts off and it`s something like this. He said, a long time ago, decades ago, the Ku Klux Klan got together and said, how can we really hurt the African-American children, l permanently? How can we ruin their lives? And when they designed was the public school system. (END VIDEO CLIP) MADDOW: That man`s name is Rex Sinquefield, he`s the conservative zillionaire trying to use his own money to remake politics in the great state of Missouri. He made that remark on tape there in February of 2012 when he explained it must have been the Ku Klux Klan that invented the public school system to really hurt African-American children permanently. The Klan invented public schools. He said that in 2012. He later apologized for it, saying he was sorry for making that reference. But after Missouri got rid of its campaign finance rules in 2008, that guy`s money is the money that has absolutely dominated Missouri conservative politics ever since. "The Wall Street Journal" profiled him in 2012. Actually, it was a few months after he made the Klan comments. "The Wall Street Journal" called him one of the super PAC men, comparing him to Sheldon Adelson or the Koch brothers. By then, by the fall of 2012, Mr. Sinquefield had already spent over $20 million of his own money, all in Missouri, all since they dropped the campaign spending limits in that state. So, just between 2008 and 2012, he had already dropped more than $20 million of his own money, with plans to spend a lot more. And that kind of money goes a long way in a single state. He said at the time that his two priorities for things he wanted to change in Missouri, were schools, which again you heard him say he feared were invented by the Ku Klux Klan to enslave people, schools and taxes. In 2012, he personally bankrolled a ballot measure that would have basically killed all income taxes in Missouri altogether. No more personal income taxes, no more corporate income taxes. It would get rid of taxes altogether in terms of income and replace them all with a sales tax. He got -- he was working on getting that in the ballot, and unfortunately for him, polling indicated that people in Missouri basically hated the idea. And when the polling turned out really bad for his ballot measure on getting rid of all income taxes, he pulled that ballot measure in Missouri. But at the time, he said he thought he might be able to get Missouri to get rid of all its taxes anyway, even without this ballot measure idea that he had that didn`t work out. And he thought he might be able to get it done in Missouri anyway, because of something that was going on next door in the deep read state of Kansas. Kansas, you probably know is in almost Oklahoma territory when it comes to how red a state it is. In 2008, President Obama won a grand total of three counties in Kansas. In 2012, he won a grand total of two counties in Kansas. In Kansas, the Republicans control the statehouse by an almost 3-1 margin. They control the state senate, 32-8, and, of course, the governor is a Republican as well. The governor is former U.S. senator and former Republican presidential candidate, Sam Brownback, who won election in 2010 by more than a 30-point margin in Kansas. But now, even in a state that is that red, even after Sam Brownback won the governor`s race in 2010 by more than 30 points, Governor Brownback now looks to be at risk of losing his seat this fall. He`s up for re- election in November. He`s running against a Democrat named Paul Davis, who was one of those very few Democrats in the Kansas statehouse. The Real Clear Politics average of polling on that gubernatorial race shows that Sam Brownback is basically within the margin of error. He`s within 2 1/2 points of this very little-known Democratic challenger he`s got. The last Public Policy Poll in Kansas was in February. It had Paul Davis beating Sam Brownback by two points. Kansas is so red that Attila the Hun ought to be able to win an election in Kansas if he only had an "R" listed after his name on the ballot. Sam Brownback is apparently no Attila the Hun, because Kansas is against him. His approval rating as governor is hovering around 33 percent. You think in a state that red, President Obama would have a terrible approval rating, you`re right, he does a terrible approval rating in Kansas. But Sam Brownback`s approval rating is even lower than President Obama`s is. And some of Kansas`s bad feelings about their governor may be about all the recent reporting on a big FBI investigation into Mr. Brownback`s inner circle in state politics, including his longtime chief strategist. The FBI is reportedly looking into whether there`s pay-to-play corruption around Sam Brownback`s way of governing in Kansas, whether lobbying dollars and campaign contributions have been leveraged or even coerced in an illegal way as Governor Brownback has pushed through his legislative priorities. So, that may be part of it, those FBI stories. There have been no indictments or anything yet, so nobody really knows what that reported FBI investigation is going to come to. But regardless of whether team Brownback in Kansas got their favored policies passed through some illegal means or not, we`ll find out when the FBI finally speaks about what they`re looking into, whether or not they got those things, the things they got passed, passed by illegal means, the fact is, they did get a heck of a conservative agenda passed. And Kansas really seems to hate that agenda. They seem to hate those policies. Like, this is from the internals on that Public Policy Poll. Do you think public schools in Kansas are adequately funded or not? Not, by a 28- point margin. Do you think Sam Brownback`s tax plan has been successful or not? Not by another giant 21-point margin. Kansas is under complete Republican control. It`s Sam Brownback in the governor`s office, Republican control in the House, Republican control in the Senate. Their entire congressional delegation is all Republican as well. And even after they had that total Republican control, in 2012, Sam Brownback went on a campaign of cleansing fire and worked actively to get Republicans who weren`t conservative enough ousted from the state Senate. He got nine Republicans in the Senate replaced with more conservative Republicans. He`s not only got complete control in terms of party affiliation, he`s got complete control in terms of conservative Republican affiliation. And with that complete control, he pushed through the most important item in his agenda for the state, the biggest tax cut in Kansas history. By some measures, it is the biggest tax cut of any state in America in multiple decades. And when Sam Brownback pushed through that really radical tax plan in 2012 and popularity expanded it in 2013, that was the policy move that got Rex Sinquefield, the Klan-invented public schools guy in Missouri, that`s what got him so excited about what might be possible next-door in Missouri. He called what Sam Brownback did on taxes in Kansas, he said, it was, quote, "unbelievably brilliant." Mr. Sinquefield said in "Forbes" magazine that Sam Brownback`s visionary leadership was, quote, "schooling Missouri on tax policy." Sam Brownback himself wrote an op-ed claiming that his biggest tax cuts in history would be a shot of adrenaline into the heart of the Kansas economy. And his biggest cheerleader, other than himself, was across the state line to the east in Missouri, this guy, Rex Sinquefield, who wanted Missouri to get rid of all of its taxes, too. And he thought Kansas` experiment, Kansas` Sam Brownback government experiment would go so well that Kansas getting rid of all of their taxes would be such an economic boon to Kansas that the state next door to the east would have no choice but to follow suit. That was the thinking. And that`s how Missouri was going to get to zero taxes, by watching how wonderfully it worked out in Sam Brownback`s all-red Kansas. That was the plan. Turns out what Sam Brownback did in all-red Kansas has turned out to be a disaster. In January, a big warning flare was fired by the nonpartisan research service from the Kansas legislature. They found that cutting all the revenue, cutting all the income out of the state budget meant -- surprise, that there was no revenue in the state budget. There was a giant hole where the revenue had been. That was the official state report in January. Then, in March, it got much worse, when the Kansas Supreme Court ruled that by law, by the state constitution, Kansas needed to increase what was it was spending on public schools, where is that money going to come from. And then, in April, there was a huge shock in Kansas state government when the state realized that it was going to be taking in almost $100 million less that month than it expected for the month of April. Revenues were already down a half billion year to year since last year, and then, oops, in April, it turns out, another $100 million they thought they were getting, guess we`re not getting that. That was last month. That was April. And then, last week, the real hammer fell, when the Moody`s credit agency downgraded Kansas`s bond rating, citing Kansas` relatively sluggish recovery compared with its peers and specifically calling out Sam Brownback`s magical thinking around these huge, unprecedented tax cuts, for which he apparently had no plan for the impact of. Quote, "Eliminating a tax that`s been in place for many years and has accounted for a large share of revenue entails risks," says Moody`s. So, Sam Brownback has created a mess in Kansas. And "The Kansas City Star," they say he is suffering from a political brownout between the FBI investigation into his inner circle with and his right-hand man, forever, and into how he got all of these policies passed, the state bond rating getting downgraded, the governor`s plummeting popularity. They say, you take it all together, and this amounts to, quote, "new doubts about whether Governor Brownback`s ability to win a second term in a state that is as red as any in the nation." On the same day that Kansas got its bond rating downgraded, in the neighboring state of Missouri, the governor there, was named Jay Nixon, he vetoed a Republican proposal to cut Missouri`s taxes the way Sam Brownback cut Kansas` taxes. Missouri is one of the few states in the nation that has a solid AAA bond rating. Governor Nixon said, listen, we`re not going to jeopardize that by doing something as reckless as what Kansas just did when they flushed their economic prospects down the toilet with a tax thing like this. Jay Nixon said Missouri Republicans are, quote, trying to follow Kansas down the fiscally irresponsible path. He said he would not stand for it and he vetoed the Republican tax cut proposal in Missouri. But now, now, Missouri Republicans overrode that veto. They have thereby forced through a Kansas-style fiscal disaster plan for the neighboring state of Missouri. Even with a Democratic governor, Missouri has taken a real right turn under the tender ministrations and the tens of millions of dollars of Rex Sinquefield, right? The well-funded, newly emboldened Republicans in the state of Missouri, they blocked Medicaid expansion, which led to this dramatic protest in the state capital yesterday. The protesters actually shut down business in the state senate over the Medicaid decision. Republicans in Missouri are trying to enshrine strict scrutiny for gun rights into the state constitution. And that may not sound like much, but that is such a fundamentalist approach to gun rights that it has really wide implications that have scared other states that have tried this. But Missouri is steaming straight ahead to put that in their state constitution. Missouri is down to one last abortion clinic in the entire state. This year, Republicans in the Missouri legislature introduced 32 separate pieces of legislation against that one clinic. They`ve got one abortion clinic left, 32 bills this session to try to shut down or curtail the activities of that one last clinic. With no campaign finance limits anymore and with an eager conservative godfather funding every step they take further to the right, Missouri is doing everything it can to try to turn itself into a deep-south style red state, but with what they just did on this tax issue, did they just make a decision to follow Kansas off the cliff? Joining us now is David Helling, political reporter for the "Kansas City Star." Mr. Helling, thank you very much for being here. I really appreciate your time tonight. DAVID HELLING, KANSAS CITY STAR: Great to be with you, Rachel. MADDOW: So, what did push Missouri lawmakers to proposal these very, very deep tax cuts, even as Kansas was really flaming out because of them? HELLING: Well, part of it is Rex Sinquefield, as you suggest. He`s been heavily involved for years, Rachel, in trying to push a no-income tax agenda in the state of Missouri, as you suggest. He`s tried to get that on the ballot. He`s really a supporter of turning to sales taxes instead of income taxes. But part of it is just philosophy. Missouri, as you also point out, really had a choice about ten years ago, will we be Arkansas and Mississippi, or will we be Iowa and Minnesota? Missouri, as you might know, is almost evenly divided between Republicans and Democrats in most years and then about 10 years ago, it started its slide into conservatism and it is firmly there now. So, you put that sort of ideological approach together with Rex`s money and you get what you got this week in the legislature. MADDOW: In terms of that path, that sort of decade-long path that you just described there, is there any equivalent force on the left or to strengthen the Democrats` hand in Missouri? Is this a transformation that`s really taken place entirely within conservative politics? Is there any counter-game? HELLING: Democrats have a role in Missouri, unlike Kansas where they`re virtually nonexistent. Democrats in Missouri do have some voice. Claire McCaskill, of course, is the senator, Jay Nixon the governor, both Democrats. Republicans have not done extremely well at the statewide level. They lost the race for governor. They do have the lieutenant governorship in the state. But Democrats in Missouri have a unique challenge. They must appeal - - if they are to win, they must appeal to rural voters as well as urban voters in Kansas City and St. Louis and to some degree in Columbia, in Jeff City. So, even people like Claire McCaskill and Jay Nixon strike a populist, conservative, in some senses, moderate tone with voters in the state. There is no real -- with one or two exceptions, there is no real progressive movement in the state, and that showed up in the last state elections for the legislature, the House and the Senate. Jay Nixon has virtually no working ability in that statehouse at all, Rachel, owner to sort of convince lawmakers by the sound of his voice, to change their views. And they often listen to Rex Sinquefield, the American Legislative Exchange Council, ALEC, also has a heavy presence in Missouri, as well as Kansas. So, those are the voices they hear. There`s no liberal or progressive opposition really in this state. MADDOW: I feel like I have heard that, really, just in my observations of Missouri politics, particularly with Claire McCaskill on the federal level. I continue to believe that she would make a very credible national level candidate for the Democrats. Not because I agree with her on lots of policies. She`s nowhere near liberal like I am, but simply because she does talk in populist terms, very central terms, and she`s made that case, I think it was the Missouri Democrat way of talking to a big, broad audience. And that`s why I was so surprised to see Governor Nixon making this case. Hey, we can`t do this. They just got their bond rating downgraded. We`ve got a AAA bond rating, we`ve got to hold on to that. That seems to me like sort of the ultimate fiscal conservative, centrist, kumbaya message, and yet, it just didn`t go anywhere. HELLING: Right, and for that matter, Jay Nixon is a big fan in some instances of tax credits, tax breaks for big business. He tried to get the Boeing plant to come to St. Louis. He offered a huge package of tax breaks for that. He gave incentives to the auto companies to stay in the state, Rachel. Again, that`s kind of a traditional country club banker Republican mentality. Give big incentives to big business to create jobs. That`s his approach. Again, he gets a bit of a pass, because Missouri is just that kind of a state. It`s hard to believe that an out-and-out progressive liberal candidate has any chance at the statewide level, and I think Jay Nixon senses that. Now, a lot of -- he`s not really popular among some Democrats. For example, he`s had a sort of a low-level feud with McCaskill for years about who really control s the party in the state. And Jay Nixon, to a degree, like McCaskill, really looks out for himself. You know, his own re- election is more important than electing more Democrats to the legislature so you wouldn`t have to go through what he just went through. That`s a criticism you`ll hear of Jay Nixon. But, again, there may be a lot of self-preservation in that. Missouri, as I suggested, and as you suggested as well, is much more Southern in its approach to politics than it is industrial Midwest or in north of the state border. MADDOW: And as you point out, that was a choice. That outlook was a choice and it has been a fascinating transformation to watch. Dave Helling, reporter with the "Kansas City Star" -- I really enjoyed your reporting on this, Mr. Helling. Thank you fore being here. I appreciate it. HELLING: You bet. My pleasure. MADDOW: All right. There was an event at the U.S. capitol, inside the U.S. capitol, tonight, available live streaming, on a place you would not expect to be allowed to live stream events from the U.S. capitol. This story has not been anywhere today. I find it absolutely astonishing and that`s next. (COMMERCIAL BREAK) MADDOW: Say hello to Father Damien. He was born in Belgium, but he moved to Hawaii where he served the leper colony in Molokai for nearly two decades before he himself succumbed to leprosy. Father Damien. He represents Hawaii. And then there`s Brigham Young. He`s there representing the great state of Utah. The great state of Mississippi decided to send Jefferson Davis, president of the Confederate States of America. Montana decided to send Jeannette Rankin, the first woman ever elected to the United States House of Representatives. Michigan sent Gerald Ford, as you can see, he`s in period dress from the 1970s. Texas sent Sam Houston. Alabama sent Helen Keller. Wisconsin sent this great one, a fighting Bob Lafollette. In statuary hall in the United States Capitol, every state gets to send two statues. It used to not be so tightly regulated, but apparently by the 1930s, there were so many statues stuck in there, they were stacked up three deep, and you couldn`t see what any of them were. So, Congress decided they would impose some order on statuary hall and set the terms by which the states would get to send stuff, and that evolved, eventually, to today`s current rules in which every state gets two statues. And you can switch them out as often as you want to, but at any one time, every state only gets two. Congress gets to make the rules for statuary hall, because statuary hall is in Congress. It`s part of the U.S. capitol building. So, it`s not just U.S. government public property, it is physically part of the Capitol. We own it. And Congress controls it. It`s like the equivalent of the Rose Garden at the White House or the ceremonial East Room at the White House. It`s an integral part of that iconic facility, that iconic building, which is both the symbol and the physical home of our federal government. Do you know what World Net Daily is? World Net Daily is the further than out there conspiracy theory Web site that for years now has been the home to the birther movement, which claimed that President Obama secretly was not really president, because secretly, he was foreign. And the president`s real birth certificate would clearly show that he was secretly born in Kenya! Now, when the birther idea fell out of favor on the right for most people, World Net Daily became kind of a weird amalgam of continued conspiracy theories about President Obama, but also it`s now the place where you can get as many DVDs about cane fighting as you can possibly want. At World Net Daily, you can also learn all about the blood moons. What do the blood moons mean? What do they tell us about President Obama being secretly foreign or Muslim or whatever? Also, did you know that President Obama is building a Death Star? Last year, House Speaker John Boehner gave permission for a conservative pastor from Texas to use statuary hall for an event. The event was billed as a celebration of the inauguration of George Washington -- George Washington being sworn in as president for the first time, right? What it turned out to be, though, was not that. Not what it was advertised to be. The most memorable highlight from that event was picked up by the folks at right wing watch. And it was when Congresswoman Michele Bachmann, she used her time in statuary hall, supposedly for this George Washington event, she used her time at the podium in statuary hall, to promote a World Net Daily-sponsored event called, apparently, 911 Pray. And while she was shouting out World Net Daily and their expected event that she was also going to take part in, Michele Bachmann also explained that she thought that not only 9/11, but also Benghazi, were caused by God being displeased with America. God did 9/11 to us and Benghazi to us because God was mad at us, because we were bad. (BEGIN VIDEO CLIP) REP. MICHELE BACHMANN (R), MINNESOTA: Our nation has seen judgment, not once, but twice, on September 11th. And that`s why we`re going to have 9/11 pray on that day. Is there anything better that we could do on that day? (END VIDEO CLIP) MADDOW: Our nation has seen judgment not once, but twice on September 11th. You know, Michele Bachmann was made a member of the House Intelligence Committee by the House Republican leadership. And last year, while promoting a World Net Daily 9/11 pray event, she proclaimed that she believed that God did 9/11 and also the Benghazi attack to punish America for our sins. She`s on the intelligence committee. And she made those comments in statuary hall, because House Speaker John Boehner allowed that location, allowed statuary hall to be used by these guys for their crazy Michele Bachmann prayer event. Well, that event is now happening again. That event is going on this year, as we speak, right now. John Boehner let them do it again, after Michele Bachmann did that last year. In fact, they brought Michele Bachmann back this year as the host of the event. And if the World Net Daily stuff was not clear enough before, consider that this year`s the event`s Web site, Washington, amanofprayer.com. It has a link as to where you can watch the simulcast of this event. You click that button at the top right of your screen and you are brought to worldnetdaily.com. Because when the Republican Party gets control of Congress, they also get control of all the public resources that are controlled by Congress, including statuary hall in the U.S. Capitol building, and when they have control of resources like that, they in turn hand over those resources to Michele Bachmann telling us 9/11 was done by God because he was mad at us and the world net daily conspiracy theory Web site about how blood moons explain Kenya, Muslim, Obamacare. Your tax dollars at work right now, as we speak, in statuary hall at the U.S. Capitol. (COMMERCIAL BREAK) MADDOW: If you, like me, are a fascinated is follower of Massachusetts Republican politics, you might have seen something like this popping up on your Twitter feed last night or today. (BEGIN VIDEO CLIP) UNIDENTIFIED MALE: One million dollars. (END VIDEO CLIP) MADDOW: If you were seeing a lot of references last night and today to Dr. Evil and his $1 million ransom -- well, the smoking remains of what used to be Republican politics in the American Northeast are to blame for that. It is an incredible story and it is coming up. Stay with us. (BEGIN VIDEO CLIP) UNIDENTIFIED MALE: One million dollars. (END VIDEO CLIP) (COMMERCIAL BREAK) MADDOW: This is St. Petersburg in Russia, used to be called Leningrad. It`s the second largest city in Russia after Moscow. Until 1918, St. Petersburg was the capital of Russia. As a city, it is often described as the most western place in Russia. It`s a hub of culture and art and innovation. St. Petersburg is also very pretty. And once a year, heads of state, business leaders, and executives from all over the world, they go to St. Petersburg to attend what`s called the annual International Economic Forum. And for Russian President Vladimir Putin, that economic forum every year is a big deal. He essentially hosts it. He`s right there in the center of everything, rubbing shoulders with all the elites, the conference is super lavish, the conference is super productive. A lot of deals get signed. Business happens at this event. This infographic was posted on the forum`s Web site about the 2013 event. More than 6,000 participants, 81 countries represented, more than 100 contracts signed at the gig itself, totaling lots and lots of rubles, totaling almost $300 billion. That was 2013. The 2014 forum is set for later this month, May 22nd to May 24th in St. Petersburg. Earlier this week, "The New York Times" reported that President Obama`s advisers were reaching out directly to top executives from American big companies. Alcoa, Goldman Sachs, Pepsi, Morgan Stanley, ConocoPhillips, all big multi-national companies that do business in Russia. And the White House reached out to the executives from those companies to basically ask them to skip the St. Petersburg thing this year, to pull out as part of the administration`s efforts to economically isolate and punish Russia for what it`s been doing in Ukraine. The chief executive of ConocoPhillips did agree to skip out. The chief executive of Alcoa and the chairman of the United States Russia Business Council, they canceled their planned appearances late last week. The chief executive of Goldman Sachs, he is still listed as a confirmed participant at the forum as of today, but apparently he`s not planning on attending. That`s according to a company executive that privately told "The New York Times" that, quote, "There`s almost zero chance that the Goldman Sachs chief will go to Russia unless the Ukraine situation suddenly reverses course." And the thing is, if all these American companies just pull out, especially this close to the event, some of the biggest and richest companies in the world snubbing Russia like that and saying, nah, I`m not coming anymore, that would be really embarrassing for President Putin. He personally, proudly intends the forum each and every year and makes sure he`s in all the pictures. Well, today, it turns out the weirdest and most unexpected thing happened. Speaking at the Kremlin, President Putin announced that he is changing course on Ukraine. He`s pulling back the tens of thousands of Russian troops that he had posted on the eastern border of Ukraine. He`s also calling for the planned secession referendum for Ukraine to be called off, just five days before the planned vote. He also reportedly said the upcoming presidential election in Ukraine is a step in the right direction. And that`s insane. That is a remarkable U-turn, because just days ago, they were saying the prospect of a presidential election in Ukraine is absurd. Vladimir Putin`s comments today came after a meeting about the situation in Ukraine that he had with the president of Switzerland. Mr. Putin came out of that meeting changing his tune about Ukraine. And now, the Swiss president is reportedly the man being tasked with drafting a road map aimed at resolving the Ukraine/Russia crisis. So far, the United States and NATO both say there`s no tangible indication that Russian troops have actually moved away from the border. But after the sanctions of Russian officials and executives, after the planned move this week to make life miserable and expensive for all Russian banks, beyond the individual banks that were already sanctioned, after pressure by the White House for U.S. executives and companies to not attend, to not show up at Russia`s annual big business capitalism pageant in St. Petersburg, did Vladimir Putin, did Russia just blank? Blanksky? I don`t think that`s what it means. Does this surprising rhetoric from president Putin today mean that the American-led international pressure on Russia is working? Is it possible that he`s bluffing? Joining us now from Donetsk in Ukraine is NBC News chief foreign correspondent, Richard Engel. Richard, it`s great to see you. Thank you for being here. Let me ask you right off the bat if you believe that Vladimir Putin is actually moving his troops? RICHARD ENGEL, NBC NEWS CHIEF FOREIGN CORRESPONDENT: No one here in Ukraine seems to believe that Vladimir Putin has changed his mind and is a giving up on Ukraine, doesn`t want to have influence here, and is accepting the revolution that took place in Kiev. The Ukraine government in Kiev called it, quote, "utter nonsense." The question is, did he blink? Did he have -- was he -- did he succumb to pressure, or is this some sort of tactic? And the Ukrainian government and analysts we`ve spoken to believe that this is a tactic. That he`s trying to portray himself as a peacemaker. He didn`t just say that he would withdraw the 40,000 to 50,000 troops on the Ukrainian border. He said he`d already pulled them back, which is very bizarre, because that is incredibly easy to verify. You just call up the satellites and look down, and people we`ve been speaking to from the CIA and the Pentagon have done just that. And when they look down, the troops are still there. The militias, which are in the square behind me, just a few hundred yards behind these trees, they were confused by what is going on today. They don`t know -- are they still going to be having this referendum in a few days, calling for independence? They want to join up with Russia, but if Putin says don`t do it, then why would they be holding the referendum to join with Russia if Russia is saying -- well, maybe we won`t take you. So, it was a very confusing move by Vladimir Putin, but the Ukrainian government and U.S. officials think it was certainly a ploy. MADDOW: Richard, in terms of the situation on the ground and, obviously, there`s been a lot of violence there recently, and the tension has boiled over into some scary situations in terms of just the riskiness of being there. Do you get the sense that this will make tensions, I guess, get worse, simply because it introduces this element of uncertainty as to what happens next, and who`s on whose side? Or will this calm things down, do you think? ENGEL: I don`t think it`s going to calm things down, because we have a very volatile calendar ahead of us. And if you look at the schedule of events over the next few days and few weeks, there`s a lot of potential flashpoints. On Friday, the 9th, that is victory day, when Russia celebrates its victory in World War II against the Nazis. And here in eastern Ukraine and across Russia, they are planning on holding big celebrations. All of the pro-Russian nationalists are going to come out. That is a potential enormous flashpoint. It is a point of pride for the Russians here, who have been wearing the same armbands and colors that were symbolic of the Russian victory over the Nazis. And this whole conflict is being couched in that World War II ideology that once again, Russians and pro-Russian nationalists here in Ukraine are fighting the Nazis, who took over in Kiev. So, that`s a potential big flashpoint. Then this referendum was supposed to take place just on the heels of Russia`s equivalent of V.E. Day. Will it take place or not is now an open question. But if there`s big clashes on Friday, then you could see a situation where Putin said, look, I did my best, I pulled back troops, I was calling for peace. Now, look at the violence on the ground. It`s not my fault. It`s those Nazis in Kiev who didn`t want to pick up this gauntlet of peace that I`ve thrown down. MADDOW: Fascinating. You`re exactly right in terms of the, what comes next, that will be the real verification of what this means. There`s, of course, also the possibility that Vladimir Putin himself doesn`t know what comes next. That he maybe is playing checkers and not chess here. But the story is fascinating. NBC News chief foreign correspondent, Richard Engel -- Richard, thank you for staying up until the dead of night to be with us. I really appreciate it, man. ENGEL: Not a problem. MADDOW: Thanks. All right. If you think running for elected office is a racket. One of the best arguments you`ll ever hear to support that theory is coming up. I swear. Stay with us. (COMMERCIAL BREAK) MADDOW: One of the stories that we have followed on this show is the not inconsiderable spectacle of huge freaking explosions all over the United States and Canada. This one was outside Castleton, North Dakota, in December. The following month, there was also this one in New Brunswick in Canada, at a place called Plaster Rock. That one was not even as bad as this one in Canada last summer. This was the one in Quebec that killed 47 people and destroyed most of a town. Then, there was this one, just last week, in Lynchburg, Virginia. In all of these cases, the explosions were so huge and the fires burned so hot that the local authorities basically couldn`t fight these fires. These fires were un-fightable with normal firefighting equipment and normal firefighting expertise. So, in all of these circumstances, the firefighting first responders had no option but basically just to let them burn. And in all of those giant explosions producing huge, un-fightable fires, the thing that blew up was one of these, at least one of these -- a rail car carrying oil. In most cases, it was oil specifically from the Bakken Shale formation in North Dakota. All oil is flammable. That`s kind of the point, right? But oil from the Bakken Shale in North Dakota is even more flammable than normal oil, so much so that this car, this type of rail car, which is the workhorse of the industry of shipping stuff by train, it apparently cannot safely transport all of this oil that we`re now producing hand over fist in this country. At least it cannot transport that kind of oil without this happening way too frequently. And no matter where you live in America, this pertains to you, because whether you live in a small town or in a city or in the suburbs or out in the middle of nowhere, if you have ever seen a trail rumble through your town or anywhere near your town, and you know you have, odds are nowadays, that unless it`s an Amtrak train or you live in Disneyland and it`s the monorail, odds are that if that train that you`ve seen anywhere near your town is carrying any freight at all, it is carrying oil. And it`s carrying it in one of these prone-to-explode tin can rail cars that people are now calling the Ford Pinto of rail cars. The number of rail cars full of oil shipped in the United States went from less than 10,000 in 2008 to more than 400,000 last year. These things are everywhere, and all of a sudden. And even the industry admits that these cars are not a safe way to transport oil. Well, there has been a new development on this story today that we`ve been covering for a few weeks now. Just one week after the huge fireball in downtown Lynchburg, Virginia, that happened last Wednesday, one week from that, today, the federal Transportation Department announced, unequivocally, that these cars should no longer be used to ship oil that comes from the Bakken Shale in North Dakota. These cars make up about 70 percent of the fleet of rail cars that we have got in the United States. So if, as of today, these cannot be used anymore, that`s a really big deal. Not just for the threat of your downtown blowing up like a wartime conflagration the next time one of these bomb trains rolls through your town, but also for the industry, which, again, this is the workhorse rail car of the industry, and the industry does not want to spend the money to upgrade ten of thousands of rail cars to stop the risk of this. It remains to be seen if the oil companies will pay attention to this voluntary directive today from the Transportation Department. What the Obama administration announced today is a safety advisory. It doesn`t require anything by law, but it does tell the oil industry and the rail industry that what they`ve been doing, shipping this oil all around the country, is unsafe and they should stop doing it. If they don`t stop doing it, then the next question is whether or not the administration will go one step further, like Canada has, and make this change into law. Make it binding. If it`s no longer a safety advisory, but a binding rule, if they do that, expect the oil industry to start wailing like a roomful of kindergartners seeing their moms walk away from them on the first day of school. The safety advisory to stop the bomb trains went out today. Now, let`s see how the oil industry responds. Watch this space. (COMMERCIAL BREAK) MADDOW: The State Senate and the Statehouse in the great commonwealth of Massachusetts look like this. Not an encouraging sight to behold if you are a Republican in Massachusetts. The current governor of Massachusetts, Deval Patrick, is also a Democrat. That`s him on the top left there. But Massachusetts isn`t a dyed in the wool Democratic state. As you can see here, before Deval Patrick, Massachusetts elected Republican governors for 16 straight years. You can be a Republican and win statewide in Massachusetts. And this year, Massachusetts Republicans think they might have a shot at winning the governorship again. The candidate is a guy named Charlie Baker, sort of the consummate insider. He`s served in state government. He has business bona fides, his dad worked for Reagan and Nixon. Mr. Baker has ran for governor before, and even though he didn`t win this year, his likely Democratic opponent will be Martha Coakley, who you may remember lost her race to Scott Brown in her last statewide contest when she was running for Senate. Republicans think mostly because of that Scott Brown loss, that they`ve got a shot at beating Martha Coakley. So, Massachusetts Republicans think they`ve got a candidate in this guy Charlie Baker, who can maybe win the state for their party this fall. They`re feeling optimistic for the first time in a long time. And so, inevitably, here`s where things get weird, because it turns out that there`s a bizarre intraparty fight right now playing out among Massachusetts Republicans, which threatens to hurt Charlie Baker`s run for governor. It goes back to the Republican nominating convention in March. At that convention, the Republicans decided by a huge margin that they were going to pick Charlie Baker to be their candidate for governor. He got more than 80 percent of the vote. But there was a runner-up, a Tea Party candidate named Mark Fisher, who got just under 15 percent of the vote, depending on how you do the math. And the reason why that`s important is that 15 percent in Massachusetts is an important threshold. If a Republican candidate for governor gets 15 percent of the vote at the party`s nominating convention, then maybe the nominee doesn`t get picked at that convention and maybe there has to be a statewide primary and any candidate who gets 15 percent or more will get a spot on that primary ballot. So, for the past couple of months, the Tea Party guy has been fighting the state party, arguing that the math was wrong. He did break that 15 percent threshold, and he should get a spot on the Republican primary ballot in September. The state party`s been refusing. They`re standing firmly behind Charlie Baker. And you can see why, right? In lots of states, obviously, Tea Party candidates have been dragging establishment Republicans further and further and further to the right in these primary battles, right? You know where that would be particularly disastrous for a Republican establishment candidate. Massachusetts, right? The last thing the Massachusetts Republican Party needs is to have their gubernatorial candidate bogged down in a primary battle with the Tea Party guy, who`s going to drag the whole conversation to the right and into crazy town. But the Tea Party will not let it go. The Tea Party candidate has sued the state Republican Party over wanting that spot on the primary ballot. His lawsuit was set to go to trial this June. And the Republicans in Massachusetts have been trying to work this out behind closed doors. But then yesterday, the amazing news broke that the Tea Party guy has offered to drop his whole lawsuit if only the state Republican Party will pay him $1 million, to which the lawyer for the state party responded, no. Massachusetts Republican Party`s attorney explained to the Tea Party guy`s attorney, quote, "I advised you and your client, as well as my own clients, that in layman`s terms, buying people off the ballot is illegal." According to press reports, the Tea Party guy`s attorney responded to that by essentially saying, OK, so it can`t be a million bucks. How about $650,000? We will negotiate. So, that`s what the Republican Party in Massachusetts is dealing with right now. They`ve got a candidate suing them for a spot on the primary ballot, who it turns out is allegedly willing to forget the whole thing if they just fork over somewhere between $650,000 and $1 million. Here`s the most amazing thing about this whole fight. As of today, the Massachusetts Republican Party is saying, we give in. They still cannot give this guy $1 million, because that is still illegal, but they are willing to give him a spot on the ballot as a Republican candidate in their primary. So, no, you can`t extort us, literally, but you can totally be one of our candidates. The Massachusetts Republican Party has always been kind of amazing, but today, they just got fantastic. Primary day, September 9th. Now it`s sometime for "THE LAST WORD." Have a great night. THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED. END