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The Rachel Maddow Show, Transcript 5/12/2016

Guests: Guest: Dan Rather, Leo Shane

Show: THE RACHEL MADDOW SHOW Date: May 12, 2016 Guest: Dan Rather, Leo Shane

CHRIS HAYES, "ALL IN" HOST: That is "ALL IN" for this evening.

THE RACHEL MADDOW SHOW starts right now.

Good evening, Rachel.

RACHEL MADDOW, MSNBC HOST: That was riveting.

HAYES: I thought so. I was riveted. I`m glad you did, too.

MADDOW: I was absolutely riveted. Well done, my friend. Thank you.

HAYES: Thank you.

MADDOW: And thanks to you at home for joining us this hour.

We`ve got Dan Rather here in just a moment. We`re excited Mr. Rather is here.

The center of the political reporting universe today was this, this weird slow motion/no motion hours-long blanket coverage of a meeting that took place in Washington, D.C. this morning.

It was a meeting between two politicians. It took place behind closed doors. Nothing in particular was expected to happen at that meeting, as far as we know nothing did happen at that meeting. And so behold, we are transfixed.

There was blanket coverage of the politicians` arrival at the meeting. There was even breathless coverage of the politicians` departure of the meeting. And the outcome was nothing, because nothing was supposed to happen at this meeting and apparently, nothing did. Tada!

I do think we`re pretty good as a country at paying attention and covering stuff that does happen. But turns out we are maybe even better at covering stuff that doesn`t happen, that we nevertheless invest with tremendous fake meanings as we talk to ourselves about what is politically important.

Today was a tremendous ado in the political media, tremendous ado in Washington about a closed-door meeting that nobody could cover, from which there was no outcome. A meeting at which nothing happened and that ultimately will mean nothing. And here is sort of the lurid way of understanding that that is true. Here is part of how we know that is true.

This is a man who was the speaker of the assembly, do we have the -- we don`t have the footage, OK. The man who was the speaker of the assembly, the equivalent of Paul Ryan`s job for the state of New York. The man who had the Paul Ryan job, not at the federal level but in the state of New York, a man named Sheldon Silver. He held that job for more than 20 years.

And he was just sentenced a few days ago to 12 freaking years in prison, 12 years, the speaker of the house. Now, that turns out to be a pretty stable part of the legislature in the state of New York. They had this -- the one leader, the House speaker in position holding that job for 20 years. There he is, Sheldon Silver. But now, he is no longer the leader of the state assembly, no longer the speaker of the house. Now he is out. And he is going to prison until he is in diapers, 12 years.

Now, that is the assembly, that is the House. The Senate, in contrast, turns out that one turns over all the time in New York. The last three guys who have been the top leader of the Senate in New York, first, a guy named Malcolm Smith, then a guy named Pedro Espada, that`s in there, and then a guy named Dean Skelos. Those three guys, the last three leaders of the state Senate they are also, all of them, now in prison.

The first two guys, Smith and Espada are already in prison today, and we learned today that the third one, the most recent leader of the Senate is about to join them in prison, getting sentenced to five years today. So, the last three leaders of the Senate will all be in prison at the same time alongside the guy who was speaker of the House for 20 years.

Now, incidentally, this new guy who is going to prison, the most recent leader of the Senate, he is soon to be joined by the guy who was the minority leader in the Senate when he was in charge of the Senate. So, both the guy in charge of the Republican Party and the guy who was in charge of the Democratic Party at the same time in the Senate, they`re going to both be in prison together along with the previous two guys in charge of the Senate and the guys who were in charge of the House at the same time.

The minority leader of the Senate is due to be sentenced next week and could look at 20 years. And when he gets there after his sentencing next week, there will be nine state legislatures, including four of the last leaders of the legislature, all in prison all at the same time, all from the same state. And the only reason it`s not even ten all in prison at the same time is because one deputy majority leader from the Senate who got convicted and would have been sent away, instead he got six months house arrest and was sick and passed away last week while still on house arrest. But had he been well enough to go to prison, there would have been ten of the same legislators from the same legislature all in prison all at once.

And the truly amazing thing about this is, it`s all for different crimes. I mean, it would be one thing if like, all the leaders of the legislature, both parties, both house, they were all put in prison in big roundup of one big scheme they were all convicted on. No, no, no, they were all convicted on their own separate schemes -- bribery, embezzlement, shakedowns, extortion. They all had their own thing going, enough to put nine of them in prison at once and another on house arrest.

And I should mention nine other state legislators from the state legislature had served their time and just gotten out of prison within the last few years. So that brings us to 19. Not that big of a legislature.

It`s just astonishing corruption. They could form a New York Senate softball league in federal prison. And some members might find it hard to get a spot on that team, it would be competitive. But New York, as astonishingly corrupt and criminal as it is, New York does not have a monopoly on this particular time of crime.

This past week, the criminal corruption trial started for a member of Congress from Philadelphia, named Chaka Fattah. Chaka Fattah is a Pennsylvania Democratic congressman who is under indictment for 29 counts and was known to be under indictment on 29 counts, when the Pennsylvania primary rolled around a couple of weeks ago, Chaka Fattah did not resign from office, and decided to hold on to his seat.

It was apparently too much for his voters of his district to reelect him right before his trial started on his 29 separate corruption charges. So, on primary day in Pennsylvania, they turfed him out. Congressman Chaka Fattah on April 26th, he lost his seat in Congress because he lost the Democratic primary for his own seat in Pennsylvania.

And that turns out to be of national importance. Because it turns out that Chaka Fattah is the only member of Congress or the Senate to have lost his or her seat for any reason anywhere in the country this entire year. I mean, you look at New York on a day like today and you think oh, we`re a country that is inured to have truly epic levels of corruption in governance, right? At the state level, we`re totally inured to it. New York didn`t even blink today when a third straight leader got sent to prison.

But that`s state legislature. We are sort of inured to it. At the federal level, I can still say this. It can hurt you to be under indictment on dozens of corruption charges when you`re trying to get reelected. And apparently, that is the only thing that can hurt you if you`re a member of the House or Senate. Nobody else has been turfed out other than Chaka Fattah, and he is on trial right now.

There has been noise this year about how Republicans are really, really in trouble if they have Donald Trump at the top of their ticket and they`re very worried if he is their nominee and will take steps to distance themselves from Trump if and when Trump gets the party nomination for president.

But you know what? Donald Trump has led the polls in the Republican Party ever since he came down that escalator last summer. He has effectively been top of the ticket in all of the 40-plus states that have voted thus far in the presidential primaries. And the net effect of all of that on down ticket races across the country has been nothing.

No incumbent who has been lost this year in either party anywhere in the country except for this one guy who is under indictment and now on trial for 29 corruption charges, and that had nothing to do with Donald Trump.

So, there was blanket coverage today of this summit. This meeting between Donald Trump and the Republican House Speaker Paul Ryan, as if something amazing might happen between the two of them. As if there is a meaningful split in the Republican Party driven either by some principled rejection of Mr. Trump by the Republican leadership, or some strategic rejection of Mr. Trump by the Republican leadership as their way of trying to save down- ticket Republicans who will somehow all be at risk of losing their seats because of the Trump electorate in a way they never would without Trump in the running, right?

The split in the party, the split in the party. Everybody tune in.

Well, here -- this was the punch line. After blanket coverage of this big meeting about the split in the party, this was the big overt manifestation. This was the bottom line, this was the result. This is how we got described to us from the horse`s mouth, this big important split in the party today.

(BEGIN VIDEO CLIP)

REPORTER: Do you expect to endorse him?

REP. PAUL RYAN (R-WI), SPEAKER OF THE HOUSE: Yes, I think this is going in a positive direction.

(END VIDEO CLIP)

HAYES: I know the Republican Party is inherently more interesting than the Democratic Party right now. It`s like, it`s sometimes like watching a reel of hockey fights strung together instead of actually having to watch hockey games, which we usually like to cover the Democrats and if you`re like me, you`re nearsighted and you can`t even see the pucks so it looks like they`re just swinging sticks around for no reason.

But in this case, and the whole case of whether the Republican Party will unify behind Donald Trump, this is not a hockey fight. They`re fine.

(BEGIN VIDEO CLIP)

REPORTER: Do you expect to endorse him?

RYAN: Yes, I think this is going in a positive direction.

(END VIDEO CLIP)

MADDOW: Yes, I think I expect you to endorse him, too. Let us actually count the number of elected Republicans in Washington who have said that they will definitely not support Donald Trump. Can we count them?

There is this man. His name is Senator Dean Heller of Nevada. He says, "I vehemently oppose our nominee."

And there`s this man, Nebraska Senator Ben Sasse. "I`m as frustrated and saddened as you are about what is happening to our country, I cannot support Donald Trump."

And there is Senator Lindsey Graham, "I cannot in good conscience support Donald Trump."

That`s three from the Senate. In the House, you got two.

Carlos Curbelo of Florida says, "I will not support Mr. Trump. That is not a political decision. That is a moral decision."

And you`ve also got Virginia Congressman Scott Rigell. "Trump is a bully, unworthy of our nomination. I will not support Trump in the general election."

So, that`s it. Three members of the Senate, and then there`s two guys in the House. Of elected Republicans, that`s it, five people. I don`t know of any others in Washington. Five.

You could fit the entire never Trump movement among the elected Republicans in Congress, right? You could fit the entire movement, forget a school bus, you could literally fit them in a station wagon with a lot of room left over for groceries and pets. If you had no pets or groceries, you could fit them into a Nissan Sentra. There are five of them total. And only one of them that anybody has ever heard of is Lindsey Graham.

There is a lot, a lot of noise. And today, blanket coverage over this split in the Republican Party that everybody is fantasizing, that everybody believes has been caused by Donald Trump. The split is made up.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

REPORTER: Do you expect to endorse him?

RYAN: Yes, I think this is going in a positive direction.

(END VIDEO CLIP)

MADDOW: That was the outcome of today`s big clash between Paul Ryan and Donald Trump, the top two politicians in the supposedly fractured and divided Republican party that doesn`t seem all that fractured and divided. I think I`m missing something here.

Here to help me find it is the great Dan Rather, host of AXS TV`s "The Big Interview".

Mr. Rather, it`s always great to have you here. Thank you.

DAN RATHER, AXS TV: Great to be here, Rachel.

MADDOW: I feel like this is one of those days when I feel like the tide is all going one direction and I`m facing the other direction and I just see things very differently.

Is there something important about this split that everybody is watching for and talking about in the Republican Party that I just don`t get?

RATHER: If so, I don`t know what it would be. First of all, I recognize for a lot of cable news network people and people like myself today it was a big news today because Trump met Ryan.

But if you analyze it carefully, not much went on there. And even whatever went on there, Trump has his own constituency now. It`s bigger than the Republican Party base itself. And they don`t care what Paul Ryan thinks, what Paul Ryan says. He is not a factor.

There is some question, how big a consistency Paul Ryan has? So that is one thing.

But frankly I see this as kind of a kabuki dance, not much going on there - - masks, posing, one way or the other. In the end, Paul Ryan may swing around to officially endorsing Trump but he is never really going to like Trump.

Trump today, yesterday and tomorrow, for Paul Ryan, Trump is like bad chili. He doesn`t want anything to do with it. But he has to.

And he is in a position now where he wants to see kind of which way the wind blows. He is under a lot of pressure in the Lower House of Congress, but in the Senate there are a lot of worried senators.

So if you want to know how this will likely turn out, just see the way the wind blows, if the Republican senators were up for re-election this year and the word about Trump at the top of the ticket. That there are many Republicans who believe that Trump is absolutely lethal for the Republican brand, and this gets to the very core of what is the party about.

Paul Ryan is miles apart from Trump on everything from immigration to Trump`s words about the Ku Klux Klan, on trade, on taxes, on continuing to support Social Security and the way it`s been supported. All of these things. They`re way apart.

But there may yet be a shotgun wedding, or whatever it`s called, a wedding of convenience between the two. But even if Paul Ryan comes around, he won`t like Trump, but in the end he probably will come around.

But I have a hunch, no reporter worth anything reports the hunches, but there is a very large section of Republicans who are still toying with the idea of putting a third man in the race. And now, whether that`s Trump dog-paddling for time to see whether it develops, unlikely but possible.

But if not, where this plays out is that Ryan officially endorses Trump and holds his nose while doing so. But as of today, if you look at the news today, there simply wasn`t a lot that went on there.

MADDOW: Yes. And it got me wondering if the whole thing that we`re looking for is just something that actually never exists in nature. I feel like on almost every election cycle, you hear about the party being torn apart. Whether it is somebody who is seen as sort of a moderate like John McCain being nominated, the social conservatives in the Republican Party said that they were going to schism, that the base felt abandoned and that would tear the party apart.

And then you go back to something more radical like 1964 and Barry Goldwater, and the prognosis from lots of mainstream Republicans at the time was that the nomination of Goldwater would be suicide for the Republican Party, that is what Mitt Romney`s dad, George Romney, said at the time. It would be committing suicide by the party.

Even if there were big breaks in the party like there were with Goldwater, it seems like we have had two parties for a long time and we`re likely to have two parties for a long time.

RATHER: That`s a very strong point. Don`t forget the 1972 election, when the Democratic Party veered left and nominated George McGovern, and President Nixon swept to a historic landslide win in that. There was a lot of talk when the Democratic party is finished it`s too split apart. It didn`t happen. But I think --

MADDOW: Yes, came back and won in `76.

RATHER: You know, you have to bet that the two parties facing, remain a two-party system. But there is some danger, occasionally, the party splits so deeply that it disappears. For example, in the 1850s, the predecessor to the Republican Party, the Whigs, split apart and that was the founding of the new Republican Party with Lincoln coming on.

But I do think, we need to keep in mind, Rachel, whether you`re Paul Ryan or anybody, with his demeanor and his beliefs, who doesn`t like Trump but worries about the party, the dislike of Trump doesn`t match their hatred of Hillary. And Trump`s best argument is -- listen, guys, whether you like me or not, do you want me or do you want Hillary?

And in the end, insofar as the Republicans become united, that`s what will unite them. And I said before it`s a mistake to underestimate Trump. He can win. I`m not predicting he will win. But he is showing the kind of strength that nobody -- very few people expected.

And he is on to something -- a combination of anger, fear, resentment, the toxic mix of racial prejudice in. And he is speaking a kind of language that a lot of people understand. If he gets into the polls in November -- again, I`m not saying he is going to beat Hillary Clinton. Hillary Clinton has the potential for a so-called blowout, but Trump can win.

MADDOW: Dan Rather, that`s scary, but really good to hear it from you but it makes sense when you put it that way, host of AXS TV`s "Big Interview" - - Dan, thank you.

RATHER: Thank you very much, Rachel. Thanks so much.

MADDOW: It`s great to see you. Thanks.

RATHER: Always a pleasure to be with you. Thank you.

MADDOW: We`ve got much more ahead tonight, including a live report from something very hot going on right now in the Democratic primary.

Stay with us.

(COMMERCIAL BREAK)

MADDOW: While this street circus and media circus and political circus played out in D.C. today, while the Beltway was focused on this meeting of Paul Ryan and Donald Trump to the exclusion of anything that may be happening anywhere else, what maybe actually the most consequential story in the presidential race started to happen actually on the other side of the country today and in the other party.

Senator Bernie Sanders has been saying for months now that he intends to win the California Democratic primary, which would be huge in terms of the sheer number of delegates available. California is the biggest prize in the entire race.

Senator Sanders says California is a state he wants to win. He says he thinks he can win it. He said as much to me at his home just a few days ago.

(BEGIN VIDEO CLIP)

SEN. BERNIE SANDERS (I-VT), DEMOCRATIC PRESIDENTIAL CANDIDATE: Well, I think we have a good chance to win California and that is something I very much wanted. We have a good organization there. We have a lot of support and we`re going to fight as hard as we can to win the largest state in this country.

(END VIDEO CLIP)

MADDOW: Now, Senator Sanders has been actively campaigning in California this week, including in front of some very big crowds. But now, something interesting has happened with just a few weeks to go before the California vote -- this sort of capstone to the whole primary campaign.

The guy running things for the Sanders campaign in California has suddenly left the campaign. Now, the California state director, Michael Ceraso was running the Sanders campaign in California. He has now just quit the California campaign just ahead of the California primary.

Mr. Ceraso was known as a specialist in digital organizing, this sort of grassroots online stuff that`s been such a big part of the Sanders campaign. He told reporters that in California, there had been a split in the Sanders campaign over whether to focus on that kind of grassroots online organizing, or whether it would be better to focus on running TV ads in California, since California is such a vast playing field.

Well, in that debate -- that strategic debate, apparently the digital guy lost. He told reporters, quote, "The campaign wanted to go in a different direction with the California strategy, so we mutually parted ways."

But if that was the fight, grassroots organizing or TV ads, and the grassroots organizing guy says he lost that argument so he now left the campaign, then you would expect the Sanders campaign to start running tons of TV ads in California, right? I mean, the Sanders campaign has run a ton of ads. They have spent almost $60 million on TV ads this far, more than any other presidential candidate still in the race.

In California, the state that the Sanders campaign says is absolutely crucial to their strategy, they have spent just over a half million dollars in cable ads thus far. But here is the other thing, they have just told MSNBC news that they will probably not spend money on cable TV ads in California, they are also not like to spend any money on broadcast ad buys in California at all.

So, what`s happening here? The digital grassroots organizing guy says he left the California campaign so that TV ads side could take the lead instead. Now the TV ad side is letting up on the throttle as well, essentially stopping its work in California.

Is the Sanders campaign out of time? Are they -- then this would be surprising -- are they out of money? Are they just not sure what would work best for them in California?

We know that Senator Sanders wants to win in California. We basically know that they feel like they need to win California. Mr. Sanders, Senator Sanders has said that he can win California. Can he still get there from here?

And the question tonight is, is he still actually really going for it? If the Sanders campaign gives up on California, what does it mean for how the race ends and when it ends?

Joining us is NBC`s Danny Freeman. He`s embedded with the Sanders for president campaign. He joins us live from Sioux Falls, South Dakota, where Senator Sanders is speaking for a big crowd of 4,000 people tonight.

Danny, it`s great to have you here. I know it`s hard to hear me. Just signal if you can`t.

But we`re trying to take in this news about the Sanders campaign seeming to really -- to ease up in California, ousting their state director, apparently stopping running ads in the state. What`s going on there?

DANNY FREEMAN, NBC NEWS, COVERING SANDERS CAMPAIGN: Well, it`s interesting, Rachel -- thank you, Rachel, for having me on.

It`s interesting, I just spoke to Senator Sanders` campaign manager, Jeff Weaver, and he basically laid out what the strategy in California is going to be. Because you are right, they`re not really spending as much money as they have in other states where they outspent Hillary Clinton by huge amounts. But rather they will target three different pillars here, the first one I`m told by campaign manager Weaver, is that they`re going to focus on the big rallies, a staple, a hallmark of the Sanders campaign, and to hope to get a lot of earned media from that.

The second thing they`re going to focus like they have before on college campuses and they`re going to make a big effort to register students early on ahead of the June 7th all-important date.

And finally, this is interesting, Rachel, they`re making a large push for Latinos in California, one of their most important place where they really think they can do well. We`re told they have a team out there in California that is dedicated to making the events that are tailored to the Latino community all across the state of California.

That will be interesting. There are 60 staffers-plus out there they say they may increase the number. But as far as TV ads and advertising, they are probably not going to rely on that as heavily as they have in other states, Rachel.

MADDOW: Danny, the reason that the TV ads seems like such a salient point is just that California is so massive, more than 30 million people, a state with a huge geographic area, a lot of different population centers, California politics people say there is no way to run statewide without being all over television.

Did they take this decision to get off TV out of financial necessary or is there strategic thinking behind it somehow not being something they need to do in order to win?

FREEMAN: It`s interesting, Rachel. As I spoke not only to Jeff Weaver but other campaign aides about that question. What does it mean that they`re not spending as much money?

There`s no secret that the fundraising, we saw the numbers month and month, kind of cut in half after Senator Sanders faced big losses. But I think they are confident in their strategy, we are talking about state director, who just left. And the state director is coming in, kind take helm of California for the Sanders campaign, he is a veteran of their campaign. He was in charge of Iowa, in charge of their big upset win in Michigan, his name is Robert Becker. And they really do believe he is their big dog and big gun to come in.

And it is clearly because they feel that Robert Becker has the trust of the senator to get things done. And the way that I`m told that, it`s again, around those big rallies.

And, you know, it`s interesting, I asked Senator Sanders a week or two ago in a press conference, are you going to change your strategy? Are you going to move away from these big rallies and go to other events and take a different approach to all-important states like California.

And he said that he`s going to mainly focus on these big rallies. But again, I think the information from his campaign manager that he will be targeting Latinos specifically, perhaps the showing of a bit of a change of strategy.

MADDOW: NBC`s Danny Freeman, covering the campaign for us live tonight in South Dakota, Danny, doing great work, modulating your voice so as not to disturb those around you, well done, my friend. Thanks, Danny. I appreciate it.

Again, I know that the focus on the Republican campaign is almost physically impossible to stop from the news media right now. But I do actually think there is something potentially determinative going on in the Democratic campaign right now in terms of this California decision and some other things going on with the Sanders campaign and the way the Sanders and Clinton campaign may or may not be running against each other anymore.

I know the Republicans are fascinating, but the Democrats have something going on right now, I`m just saying.

All right. We`ll be right back. Stay with us.

(COMMERCIAL BREAK)

MADDOW: Last month, the Republican presidential frontrunner proposed abolishing a frontrunner that no Republican frontrunner had ever proposed abolishing before. The reason the Republican had ever proposed ever abolishing it before is because it does not exist.

(BEGIN VIDEO CLIP)

DONALD TRUMP (R), PRESIDENTIAL CANDIDATE: Largely, we can eliminate the Department of Education, the Department of Environmental -- I mean, the DEP is killing us environmentally. It`s just killing our businesses.

(END VIDEO CLIP)

MADDOW: The Department of Environmental, the federal DEP, the DEP, Johnny, for short. The DEP, that is not a thing, that doesn`t exist.

But abolishing parts of the real government is something that also got put on the table today in a way that is likely to make a lot of very politically influential people very mad, and that real story is next.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

TRUMP: I supported him, I supported him for president. I raised a million dollars for him. That`s a lot of money. I supported him, he lost, he let us down. But, you know, he lost, I never liked him that much after that because I don`t like losers.

But, Frank, let me get to it. He hit me --

(CROSSTALK)

FRANK LUNTZ: He is a war hero.

TRUMP: He is not a war hero.

(CROSSTALK)

TRUMP: He is a war hero because he was captured. I like people that were not captured, OK? I hate to tell you that.

(END VIDEO CLIP)

MADDOW: Donald Trump in July saying that John McCain was not a war hero. He likes people that weren`t captured.

That incident came back this week, Mr. Trump was asked whether he regretted calling John McCain not a war hero, what he said in his remarks. It turns out now he believes John McCain is a war hero. But he doesn`t regret those past comments, specifically because those comments helped him in the polls.

(BEGIN AUDIO CLIP)

TRUMP: Frankly, I like John McCain, and he is a hero. Also heroes are people, you know, whether they get caught or don`t get caught, they`re all heroes as far as I`m concerned. And that is the way it should be.

DON IMUS: So do you regret saying that?

TRUMP: I don`t -- you know, I like not to regret anything. I mean -- you know, you say things, and what I said frankly, is what I said. And, you know, some people liked what I said if you want to know the truth. I mean, there are many people that liked what I said. You know, after I said that my poll numbers went up seven points.

(END AUDIO CLIP)

MADDOW: So, therefore, it must have been a good thing to say.

We used to think that disparaging veterans, insulting veterans, crossing veterans would be kind of a third rail in national politics. Is it?

Today, the Donald Trump for president campaign announced that they want to get rid of the V.A. They want to scrap the Veterans Administration. Donald Trump says he would be happy to privatize the V.A. as part of their overall veterans proposal. The Donald Trump national campaign co-chair telling "The Wall Street Journal", quote, "We want quality care from top to bottom. That means we want national privatization, we don`t see anything wrong with that."

You know, for all the problems in the V.A., in recent months and recent years, the long waits, employee misconduct. Given that, when it comes to killing off the V.A., veterans really do see something wrong with that.

You may remember last summer, it was Ben Carson who was then doing well in the polls running for president, Ben Carson proposed doing away with the V.A., but the response he got came not from one, not two, but from seven different veterans groups, who don`t always agree on everything, but who then wrote a letter to Ben Carson, telling him that they vehemently disagreed with his dangerous proposal to scrap the V.A.

Veterans like the V.A. They don`t want to kill it. Ben Carson proposed killing it when he was still one of many people seeking the Republican nomination and he got burned by veterans` groups for that very quickly.

Now Donald Trump, the de facto Republican nominee has proposed the same thing. Now what happens next? Isn`t this also a third rail? If there is a third rail, isn`t this it?

How do we as a country make sure that it gets treated as a third rail, if it`s stopped being treated that way?

Joining us now is Leo Shane, congressional reporter for "The Military Times".

Mr. Leo Shane, it`s really nice to have you here tonight. I read everything you write. It`s very nice to have you on the show.

LEO SHANE, MILITARY TIMES CAPITOL HILL BUREAU CHIEF: I appreciate it and I appreciate you covering veterans issues. Not a lot of folks do anymore. So --

MADDOW: Well, you know, this issue of privatizing the V.A. keeps coming up and seems to have accelerant in it over this last couple of years. We saw a lot of candidates on the Republican side sort of flirt with this idea. Is that a fair assessment of how this is sort of taken off as a popular idea on the right?

SHANE: You know, a lot of folks, a lot of folks hanging around and talk about it, but very few people said the word, privatization, that is a four- letter word in the veteran`s community. You hear quite a few proposals from Republican candidates that talk about expanding choice or expanding access or making private care more easy, but to hear the Trump campaign actually use the word privatization is fairly shocking, because folks tend to avoid that and all the connotations that go with it.

MADDOW: When we saw veterans groups get just furious with Ben Carson when he has proposed this last summer, we then didn`t hear Ben Carson talk about abolishing the V.A. or privatizing the V.A. very much thereafter. It felt at least from watching from the outside like he was really stung by that.

I wonder if, with Mr. Trump, there might be a slightly different calculus. Obviously, his John McCain comments, some of his other problems on veterans issues, including not necessarily dispersing funds to veterans groups that he raised in a very high profile way in their name, I wonder if there might, if he might have sort of a different calculus about what it means to offend veterans?

SHANE: You know, we`ll have to see. I mean, part of -- part of the issue here has been that so far, you k now, Donald Trump`s proposals on veterans reform and veterans campaign have been very broad. So, to say that they`re considering some form of privatization, that is not very specific. That could mean simply expanding the choice card program, which is very popular with Republicans. It could mean he has a magic bullet for fixing the wait times issues.

But it`s tough to pin him down on any specifics. So, he might be able to get away with the word and just putting the idea out there, without really getting tied down to some of the bigger meaning or concerns with it.

MADDOW: Leo, let me ask you about another thing that happened today. Across my desk because I saw the press release that Iraq and Afghanistan Veterans of America put out. Very angry press release, I think you tweeted a piece of it today, as well -- where they`re really upset about a big piece of veteran -- sort of an omnibus piece of veterans legislation that is moving in Congress. Almost nothing moves in congress, but there is a piece of veteran`s legislation that is moving.

And at least this one very influential vet`s group is mad about it. They say it`s essentially going to be a big cut to the G.I. bill. What do you make of their criticism?

SHANE: You know, this is actually a point of funding in the group that a lot of veteran`s groups hate. Now, what we`re hearing is that the good outweighs the bad in this bill and they`ll end up supporting it. But, you know, this is a rollback of the housing stipend for just about every veteran who`s going to school on the G.I. bill.

So, IAVA and some of the other veterans groups have raised a stink about this and say, look, if you`re going to fund veterans programs, you can`t be victimizing other veteran`s programs. It`s worth noting that Donald Trump was confronted about this on CNN a few days, and he wavered. He wouldn`t say whether or not he really supported this, said he doesn`t know about the G.I. bill and cuts about that.

Both Hillary Clinton and Bernie Sanders have been very emphatic, they`re not going to cut the G.I. bill. So, they received praise from IAVA and some of the other groups on this. And this is another issue where Donald Trump ends up going counter to a lot of the veterans groups and we`ll see exactly what that means in a long run.

MADDOW: In a normal political universe, that should burn him. It will be interesting to see if it does. We learned this year it is not a normal political universe.

SHANE: Absolutely. I mean, there seems to be a whole different set of rules this time around. So, that goes for military veterans and military members, too.

MADDOW: Yes.

Leo Shane, congressional reporter for "Military Times", one of the best military and veterans reporters in the country -- again, I do read every single thing you write. And I think you do a great service. You`re a good beat reporter. This is one of the most important beats there is.

So, thanks.

SHANE: Thank you and keep reading.

MADDOW: I will. Thanks.

We`ll be right back. Stay with us.

(COMMERCIAL BREAK)

MADDOW: So, when we started the show, this was not on our radar tonight. So, it has broken in the last few minutes. This is late-breaking news that NBC News I should say has not confirmed.

But it`s "The New York Times" reporting as of the last few minutes that the Obama administration is about to basically tell every public school district in the country that they need to allow transgender students to use whatever bathrooms match their gender identity. The administration, according to "The Times", plans to send out a letter to school districts nationwide tomorrow describing what they to do to ensure that students aren`t discriminated against on the basis of gender identity. The letter is going to be signed by officials from the Justice Department and from the Department of Education.

Now, if "The Times" is right about this, it won`t come with the force of law. But as they note in this breaking news story that`s just out tonight, the letter from justice in education, it does contain an implicit threat. In "The Times`" word, quote, "Schools that do not abide by the Obama administration`s interpretation of the law could face lawsuits or a loss of federal aid."

Now, of course, this comes right in the middle of the administration`s legal fight with the state of North Carolina over transgender rights, and the overt discrimination bill that was signed into law by that state`s Republican Governor Pat McCrory. Attorney General Loretta Lynch announced this week that the federal government would sue North Carolina over their discrimination law.

But this is something different. Once again, this big headline from "The New York Times", not confirmed by NBC News, but reported by "The New York Times" tonight, is that the Obama administration is about to issue what is called a sweeping decree, telling public schools across the country that transgender students need to be allowed to use the bathrooms of their choice.

Watch this space.

(COMMERCIAL BREAK)

MADDOW: Tomorrow is going to be a busy day. I have some specific questions about something that is due to happen tomorrow at the White House.

Tomorrow night, there`s going to be a state dinner at the White House, which is always a neat thing. State dinners are like the prom times Christmas times comic-con, right? State dinners are a huge big deal. They are as fancy as Washington gets.

But tomorrow night, for the first time in four decades, there is not going to be a state dinner. There will be a states dinner. It`s a state dinner honoring multiple countries at once. They almost never do this.

But it is not a state dinner for us and one other tomorrow, it`s a state dinner for us and five other countries, all at the same night, all at the same dinner. Finland, Sweden, Norway, Denmark, Iceland, all five. That is happening tomorrow night at the White House.

Here are my questions, all equally important.

First, do the five countries mind that they are all combined into a single state dinner? Even though they are not one state, they are five states? I mean, is there potentially a Nordic country`s beef that we don`t know about? Finland and Sweden and Norway going to be sitting there, like, who invited Iceland? That`s my first question.

My second question is about this boat. The White House has made this boat to signify the waters and excellent fisheries of these five Nordic they`re inviting over for the states dinner tomorrow. There will be one of these boats on every table. It flies each of the five nation`s flags, plus, the American flag.

The White House is very proud of this thing. They have put out advanced notice about it. They have released advanced pictures of this boat. They have even released a list of the boats` ingredients. It is apparently made of chocolate and something called gum paste.

So, my question is, can you eat the boat? Will they eat the boat? Will heads of state like hack off chunks of the boat at their table, or are they just going to like politely eat the cookies that are served next to it and leave that boat? And if so, what happens to the vote afterwards? Could we eat the boat?

The boat itself, chocolate and gum paste. Gum paste is a decorative icing of sorts. I don`t know. They use it in cake decorating. To me, it means that thing is up for grabs. I want to know if people are going to eat the boat.

Also, upon closer inspection, I should mention, there are thing that is light up in that boat. The windows apparently, light up. And apparently, whatever it is floating on, I see illumination devices maybe, plus a lot of work went into decorating and publicizing it, is anybody going to want to cut into this thing, will people eat it, I don`t know.

So, can they, will they eat the boat? That`s the question two.

My the third and final question about the states dinner tomorrow night is a question that is a serious question, not meant to be mean at all, but it`s about the entertainment. There is a young pop star, named Demi Lovato. She`s from Albuquerque, which is a place of New Mexico, which is neither a Nordic country, nor is it known for its boat.

But Demi Lovato is the announced entertainment for the state dinner that honors Finland, Norway, Sweden, Iceland and Denmark. So, why is that?

I`m not saying there`s anything wrong with it. She is great. She has, as they say, the jams, but why?

I have some questions, the state dinner is tomorrow. If we get answers to those questions, you will hear them on this show. You can put that in your calendar.

Also for your calendar tomorrow, you can set your watch for this one. You can set your watch for noon. Noon Eastern Time, because that is when the judge in the bridgegate case in New Jersey, that is when that judge set the deadline for the release of the list unindicted co-conspirators in the Chris Christie administration bridgegate scandal.

And that list is going to be fascinating to see. We don`t actually expect that there`s going to be any legal wrangling between now and noon tomorrow. If there is, we will let you know about that tomorrow night, too.

And, finally, while we are looking ahead, there is one other thing in your very near future, which is this -- I will be on late night with Seth Myers tonight.

(BEGIN VIDEO CLIP)

SETH MEYERS, LATE NIGHT: Because, of course, we have had a cast of characters in this campaign season. Is there anyone now that we are sort of down to three people -- is there anyone that you missed? Who do you miss the most that was running for president?

MADDOW: There were so many of them.

MEYERS: There were so many.

MADDOW: You know, I think I miss Lindsey Graham.

MEYERS: Yes, he`s a lot of fun.

MADDOW: He`s -- I mean, for one, on a serious note, like there`s -- there is a lot going on in terms of foreign policy, and like stuff going wrong in the world, like in Afghanistan, you`re 15, our war there, and Iraq, the fight against ISIS, and the civil war on Syria, and Russia is kind of going nuts, and China is scary. There`s a lot going on. I wish we were having a presidential election that was more about national security, and he was a guy who wanted to run purely on national security.

MEYERS: Yes.

MADDOW: So, I miss that. But I think, more on the day to day basis, sometimes he just kind of seemed like he was little drunk. Like little tipsy. But some of the debates, he would turn up at the bar, and hope that reporters would be there. Hey, guys. So, I miss that.

(END VIDEO CLIP)

MADDOW: That show comes right after Jimmy Fallon tonight, "Late Night with Seth Meyers". I`ll be wearing bright blue shoes and telling the whole Lindsey Graham anecdote, it goes on from there. I will see you there.

That does it for us tonight. We`ll see you again tomorrow.

Now, it`s time for "THE LAST WORD WITH LAWRENCE O`DONNELL."

Good evening, Lawrence.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED. END