updated 3/31/2010 10:44:07 AM ET 2010-03-31T14:44:07

Guest: Ada Fisher, Armstrong Williams, Jack Rice, Wendell Potter, Todd Webster, Heidi Harris, Melanie Sloan

ED SCHULTZ, HOST:  Good evening, Americans, and welcome to THE ED SHOW

tonight from New York.

These stories are hitting my hot buttons tonight. 

Ooh.  An X-rated scandal at the RNC.  My question is, what did Michael

Steele and when did he know it?  Two prominent conservatives will join me

in just a moment.  We‘ll get their take on whether Steele should stay or

go. 

The ink on the health care reform bill barely dry, but big insurance,

they‘re already looking for ways to avoid covering sick kids.  Wendell

Potter will join us at the bottom of the hour. 

Plus, what President Obama had to say about the Tea Party protesters

who think he‘s a socialist, a fascist, a joker.  It‘s all coming up. 

And more on Sean Hannity‘s alleged bogus charity.  That‘s coming up

tonight.  More on that.

All right.  This is the story that has got me fired up tonight and

focussed.  What did Michael Steele know and when did he know it? 

Now, at this hour we‘re hearing increased calls for Steele‘s

resignation.  The National Republican Committee announce last night that it

fired a staffer involved in an RNC-funded trip to Voyeur West Hollywood, a

bondage-theme nightclub.  Not good.

According to “Hotline on Call,” Allison Meyers, the director of the

RNC‘s Young Eagles program, was fired.  The Young Eagles is the 45 and

under fund-raising arm of the RNC. 

And if you think it‘s easy doing this story, believe me, it‘s not.  I

can‘t believe this. 

Now, according to their Web site, this is how it works, folks.  Now,

you get up to three national meetings each year if you‘re a Young Eagle. 

And, of course, the meetings include briefings with elected leaders and

policy experts.  And, of course, you have got some golf in there and some

tennis.  But this is where it gets interesting—entertainment and

relaxation. 

California GOP consultant Eric Brown was reimbursed for the expense

after a Young Eagles event in Beverly Hills.  A blog reported that an RNC

staffer‘s credit card was declined at the club, so Brown, he put it on the

company plastic, for lack of a better term. 

All right.  Yes, I believe that.

This is about—seriously about judgment.  What did Mr. Steele know

and when did he know it? 

What did he know about Allison Meyers‘ activities?  Did Steele just

fire her because it was a reactionary move because all this is out in the

media right now and it looks and sounds terrible?  Or is Michael Steele

just doing this because he found out right away and knew this was the right

thing for the RNC to do? 

His job at the RNC is to do what?  Raise money.  That would be the

image business. 

The number one thing in fund-raising is integrity.  And if you can‘t

guarantee where the money is going to the people who are giving it, believe

me it can unravel pretty fast. 

This comes, I think, at a critical time for the RNC.  Now, they‘re

trying to make some hay on how this health care—Obamacare, is what they

call it—is the wrong thing for the country.  So this is the last thing

that they need right now, muddy waters. 

Nine out of the last 12 months, the RNC has spent more than it has

brought in.  How Michael Steele recovers from this really is the big

question and the issue of the hour for the Republicans. 

Conservatives, well, they don‘t know what to do.  Liberals, we like

this kind of stuff because we think Michael Steele can‘t win.  I don‘t

think he can win, but normally someone‘s fate is determined in the

aftermath of all of this. 

So it‘s what‘s to follow is what could determine whether he‘s going to

make it or not as the RNC chair.  And it becomes an issue of credibility,

effectiveness, integrity.  Is your word any good? 

Now, I think about Michael Steele, and this is the gentleman who has

repeatedly gone out and trashed the health care reform bill that has got a

lot of good stuff in it.  I saw him on one talking head show.  He flat-out

lied about when this was going to be implemented. 

So this scandal, coupled with all the things that he‘s put out there

already that aren‘t true, could seriously tarnish them with these very

important Independent voters and givers to one side or another.  If Steele

doesn‘t step out and clear this thing up—and I think he‘s been ominously

silent today—it could destroy his effectiveness as a leader. 

I want to know what you think.  As head of the RNC, does he have a

shot?

Get your cell phones out tonight, folks.  This is the number.  The

number to dial is 1-877-ED-MSNBC. 

My question tonight is, do you think RNC Chairman Michael Steele

should resign?  Press 1 for yes, press 2 for no.  And I‘ll bring you the

results later on in the show. 

Joining is now is Dr. Ada Fisher.  She is a Republican National

Committee woman from North Carolina.  And also, Armstrong Williams is a

conservative radio talk show host. 

Dr. Fisher, I‘ll ask you first tonight, has Michael Steele, in your

opinion, become a liability for the RNC? 

DR. ADA FISHER, RNC, NORTH CAROLINA:  Well, I think my record is very

clear that I did not support his election to the RNC and I have been

concerned all along about his performance, but so I have been concerned

about the performance of Mr. Obama.  I think that we have a disservice

being done because the job of the RNC is to both raise money, but to

support our candidates.  And we need to ask the question, how much of the

money raised is going to the candidates? 

I have been very open, very forthright in making sure that those

issues are addressed at the RNC, and I‘m still waiting for my answers.

SCHULTZ:  So you want him to step down? 

FISHER:  I have written my comments to Mr. Steele on several occasions

about my lack of no vote of confidence in some of the things that he‘s

done. 

SCHULTZ:  OK. 

Armstrong Williams, you know how these things go in the media.  This

has taken on a life of its own.  And his silence, I think, is deafening

today. 

Has Michael Steele, in your opinion, become a liability for the

Republicans? 

ARMSTRONG WILLIAMS, RADIO TALK SHOW HOST:  Well, Michael Steele‘s

liability as a Republican did not start with the latest fiasco and the

credit card.  I mean, from him going out, having speaking engagements which

he‘s paid for, for many gaffes along the way, he‘s alienated himself from

the leadership, Mitch McConnell and Congressman Boehner. 

It‘s a serious issue with him.  He‘s pretty explosive. 

But I think in your earlier commentary, I think you said some things

that hold true in terms of—and I think it goes to the donor base.  You

know, ousting a chairman is going to be very difficult because it takes a

two-third majority.  And the full meeting I don‘t think is again until

January 2011.  And when the June receipts come in, and if the leadership in

the party and the donors begin to realize that many of these donors are

withholding funds, and they‘re going directly to the candidate, or they‘re

going to the NRCC and other places to place their money, and not funded it

through the Republican National Committee, then it becomes a very serious

problem for Chairman Steele. 

SCHULTZ:  But Armstrong, don‘t you see this as a big break for the

Obama administration and the DNC?  I mean, this is—you know, fund-

raising is not easy, especially in these economic times.  And this becomes

baggage, especially when there‘s one story—I mean, he goes out to

Hawaii, he‘s always had a pretty good, say, taste for the good life.  He

loves the corporate jets. 

When he came in, they had $22 million, now they‘re down to $10

million.  They‘re moving the money out as quickly as they get it. 

Is the Republican Party gaining under Mr. Steele? 

WILLIAMS:  Listen, Ed—

FISHER:  I‘d like to respond to that since I‘m on the committee. 

SCHULTZ:  OK.  How about that, Dr. Fisher? 

FISHER:  I think you‘re being reasonably unfair, because you have to

ask—this is politics as usual.  And one of the things that the

Republican Party has to understand is politics as usual doesn‘t fly.  And

what we‘ve seen on the Democratic side is the same thing. 

People want folks to be honest with their money.  They want people to

be accountable. 

(CROSSTALK)

SCHULTZ:  Well, Dr. Fisher, I have to take issue with that. 

Respectfully, you know, when people give $25, $50, $100, or whatever, they

don‘t think it‘s going to end up in a Voyeur Club.  I mean, this is an

issue of credibility at this point. 

FISHER:  Well, I would agree with you.  However, in the statement

released by the RNC, it says very clearly that the money for the Voyeur

Club is going to be reimbursed to the party.  The Republican National

Committee knew nothing about it.  Mr. Steele said in the press release that

he knew nothing about it. 

And if you want answers to this, then you‘re going to have to bring

Mr. Steele in.  Because I don‘t know what he did and when he knew and when

he did something about it. 

SCHULTZ:  Well, that‘s a key point.

FISHER:  I knew about it yesterday.  And yesterday, when I found out

about it, I sent a response to the RNC and said this will not fly and you

need to be forthright. 

SCHULTZ:  Armstrong, let me ask you now, is the timing of the firing

of the assistant, did it happen right away, or did it happen after the

media got on this story and days after?  I mean, I think Mr. Steele‘s

judgment has to come into question right here. 

WILLIAMS:  Well, I think Chairman Steele‘s judgment has been in

question since he became the chairman.  And you have to also understand

that Tucker Carlson, who is no liberal icon, broke this story. 

And the bottom line, this happened back in January, if you were to

believe the reports.  The question you must ask is, why did it take so long

for them to realize that this was an issue?  And why would someone within

the RNC approve something like this? 

You must ask about their judgment.  Why would you even approve almost

a $2,000 bill?  You‘re right about something.  If people are spending their

money to elect candidates, and there are people out there who are very

disturbed about the passage of the health care bill and other issues as it

relates to the Obama administration, and if your money is being spent on a

Voyeurs Club, I mean, people‘s money—people work hard for their money. 

They believe in our cause, and the cause is not in some sex shop, or this

pseudo-sex that is being reported.

So the bottom line, this should have never happened, but a staffer was

allowed to sign this invoice in the first place.

(CROSSTALK)

SCHULTZ:  Dr. Fisher and Armstrong Williams, I‘ve got to run.  Great

to have you with us tonight.

FISHER:  It was inappropriate.  And I would agree that it‘s

inappropriate.

SCHULTZ:  OK.  Very good. 

Great to have you on, Dr. Fisher.

FISHER:  Thank you for inviting me.

SCHULTZ:  And Armstrong Williams with us tonight.

And, of course, we‘d like to have Mr. Steele come on this program and

explain the methodology of all of this.

For more on what this really means for the Republicans in the long

haul when they‘re supposed to be gaining ground on this terrible health

care bill, according to them, Joan Walsh, editor-in-chief of Salon.com.

Joan, your thoughts?  Is this big baggage for the Republicans?

JOAN WALSH, EDITOR-IN-CHIEF, SALON.COM:  I think it is big baggage. 

There are two key facts here, Ed.

One of them is just the hypocrisy of it.  And once again, we have this

party that stands for very narrow values—no gay marriage, put women back

in the home, no contraceptive freedom, et cetera.  And there they are

partying at a strip club, and it‘s nothing new.

We‘ve got David Vitter, we‘ve got John Ensign, we‘ve got all these sex

scandals.  So that‘s one thing. 

The main thing though is the numbers that you used earlier in this

segment.  He came in—Michael Steele came in with about $22 million, $24

million cash on hand.  Right now they have less than $10 million cash on

hand. 

So even before this embarrassment, he was not raising money.  He was

spending it way faster than he was raising it.  And he‘s become a complete

embarrassment to the party. 

But they can‘t seem to find the mechanism to get rid of him, or they

can‘t seem to find the courage to say we made a mistake.  I‘m not really

sure what it is. 

SCHULTZ:  He has got quite a bravado for a personality.  He doesn‘t

appear to me to be a guy that would voluntarily step down. 

Your thoughts?

WALSH:  No.  Clearly, he likes the fight.  You know, every time

something like this has come up, he‘s, “Brother‘s still here.  Bring it

on.”  He‘s told his critics to shut up, his Republican critics, not you and

me. 

So that‘s what he likes.  And that‘s his prerogative. 

But now, you know, we‘ve got this example of this young woman staffer

who‘s now been fired.  Now, maybe she deserves it.  Maybe it was really all

her fault.  But there‘s still something a little bit classless about that. 

And finally, this same group, the Young Eagles, do you know what

they‘re doing for recreation next month?  In April, they‘re having a

shooting party at Blackwater headquarters, Xe. 

So that‘s the kind of group this is.  Strip clubs one month—or

excuse me, in January.  Strip clubs in January, shooting parties with

Blackwater in April.  This is how they‘re raising money.  And I think the

more we talk about it, the better off we are.

I‘m very grateful to my friend Tucker Carlson for bringing this story

to light. 

SCHULTZ:  Joan Walsh, great to have you on tonight.  Thanks so much. 

WALSH:  Thanks, Ed. 

SCHULTZ:  Coming up, a ninth member of the psycho anti-government hate

militia has been busted by authorities.  The rising risk of far-right

violence is very real in this country.  For more, we‘ve got that coming up

in just a moment. 

Plus, the people accusing Sean Hannity of cheating his charity, they

are not backing down.  They say the alleged scam is far bigger than

originally reported.  One of them will join me later on in the show. 

We‘ve also got President Obama taking on the Tea Partiers. 

And a “Beckster” B-teamer lands in the zone.  What a bench they‘ve got

over there! 

You‘re watching THE ED SHOW on MSNBC.  Stay with us.

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back to THE ED SHOW.  And thanks for watching

tonight. 

A ninth alleged member of a Christian militia group accused of

plotting to start an uprising against the United States government was

arraigned this afternoon in Detroit.  Twenty-one-year-old Joshua Stone

surrendered to authorities last night after federal agents and state police

surrounded his home. 

Eight other suspected members of the Michigan-based militia were

arrested last weekend after FBI raids in Michigan, Ohio and Indiana.  They

have been charged with planning to use weapons of mass destruction to kill

police officers.  Their Web site claims they were preparing for battle

against the Antichrist. 

For more, let me bring in former CIA agent Jack Rice. 

Jack, I think there are a lot of Americans, I‘m guessing tonight, who

are out there wondering how many other groups are like this one, out there

at large that we know about or don‘t know about?  This is pretty scary

stuff. 

JACK RICE, FMR. CIA AGENT:  Without question, Ed.  I mean, that‘s the

real problem here, is you never know how far this can go. 

Remember, even if they work in isolation, what you can get are various

organizations of this type that work together.  We even found most

recently, when some of them were on the run over the last 24, 36 hours, is

that they were reaching out to other militia groups trying to get their

involvement.  So even if you grab the first nine, you never know if there

are 10, 11, 12 more. 

SCHULTZ:  Now, the FBI had them under surveillance for a year and a

half.  And it turns out that they were planning something for next month. 

Tell us about the decision to make a move on a group like this when

it‘s beyond the point of diminishing returns, that you‘ve gotten everything

you‘re going to get out of them. 

RICE:  When you look at something like this, you‘re looking for the

imminent threat.  Obviously, you want to wrap up an entire organization. 

If you only have one or two members, you don‘t want to leave the other

eight of them or seven of them dangling out there.  And so you hold off as

long as you can unless you have specific intelligence that allows you to

determine that if we don‘t do anything, we could see loss of life, loss of

property, or for some reason a reason to hold back. 

I think what the FBI, what the federal police and locals who were

involved in this as well, decided was if they don‘t do something right now,

this could get very, very serious for a lot of people.  So they made that

call and they wrapped them up. 

SCHULTZ:  Weapons of mass destruction—how sophisticated were they? 

RICE:  Well, that‘s a good question.  We know that this is more than

just your average criminal.  And that is the problem. 

I mean, that‘s always been the problem when I‘ve talked to police in

Los Angeles, New York, or any place else, is that sometimes you‘re starting

to see the sophistication, that these guys have more than the local police

have.  And so all of a sudden, it‘s not just the police against the small

fry.  It‘s a big organization. 

But I think the broader question we should probably be thinking about

is this idea of a Christian warrior.  To me, this highlights one point that

you and I have discussed in the past. 

Some have talked about racial profiling when it comes to terrorism-

related cases and going after Muslims.  And I said that that was completely

ridiculous, frankly stupid.  I mean, if we‘re going to use that same logic,

then I guess the argument now would be, what we‘re going to do is start

targeting all Christians?  Well, that would be equally as foolish. 

You look at the acts.  And in this case, these are bad acts.  Go after

them for what they do, not for what they think. 

SCHULTZ:  Jack Rice, always intelligent insight.  Very informative. 

Appreciate your time tonight, Jack.  Thank you. 

RICE:  Thank you, Ed.

SCHULTZ:  Up next, it makes sense that John Boehner opposed the

tanning salon tax in the health care bill.  After all, it‘s going to cost

him big bucks. 

But get a load of this.  The Beckster‘s understudy says the tax is

racist?  You know where that lands him.  That‘s right, in the zone.  That‘s

next. 

You‘re watching THE ED SHOW.  Stay with us.

(COMMERCIAL BREAK)

SCHULTZ:  And in “Psycho Talk” tonight, the Beckster‘s on vacation

this week, so they‘re bringing out the Beck B-team to host his radio show. 

Now, yesterday we showed you fill-in Joe Pagliarulo hollering about

how President Obama is purposely keeping us in a recession so he can win

the next election. 

Well, today, psycho sub Doc Thompson managed to out-crazy Beck‘s

comment about how Obama is a racist and has a deep-seated hatred for white

people.  He thinks the health care bill is racist toward light-skinned

people. 

(BEGIN AUDIO CLIP)

DOC THOMPSON, RADIO TALK SHOW HOST:  Racism has been dropped at my

front door, and the front door of all lighter-skinned Americans.  The

health care bill the president just signed into law includes a 10 percent

tax on all indoor tanning sessions starting July 1st

And I say, who uses tanning?  Is it dark-skinned people?  I don‘t

think so. 

Why would the president of the United States of America, a man who

says he understands racism, a man who‘s been confronted with racism, why

would he sign such a racist law? 

(END AUDIO CLIP)

(LAUGHTER)

SCHULTZ:  Beck, you must have run an Internet contest to find that

guy. 

Anyway, of course the real motivation behind the tanning tax is to

discourage a harmful activity.  Or maybe it‘s Nancy Pelosi‘s way of just

sticking it to John Boehner because he likes to tan. 

Regardless, Glenn Beck is giving no-name righty nut jobs like Doc

Thompson a platform to spew their crackpot conspiracy theories.  Saying

that a tax on tanning is racist, it is “Psycho Talk” big-time. 

Coming up, insurance companies thought they were, you know, going to

be able to pull a fast one on kids with pre-existing conditions.  But team

Obama made them think again.  Cigna whistleblower Wendell Potter will join

me next.

And Sarah Palin just took her hopey-changey thing joke way too far,

and we‘re going to call her out on it. 

Plus, Obama rips the Tea Partiers. 

And Shep Smith doing it live!  I‘ll show you that in the “Playbook”

coming up.

Stay with us.

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back to THE ED SHOW.  Thanks for watching tonight. 

Earlier today, President Obama put the finishing touches on the health care

reform bill by signing the reconciliation fixes bill into law.  But big

insurance companies are already trying to get around one of the central

provisions of the law, providing health care to kids with preexisting

conditions.  As of September, insurance companies will no longer be able to

deny sick children coverage of their parents‘ plans.  But lawyers for big

insurance say that rather than cover the child, the companies can just

refuse to sell coverage to the entire family. 

Health and Human Services Secretary Kathleen Sebelius sent a very

blunt letter to the insurance umbrella AHIP yesterday saying, quote,

“health insurance reform is designed to prevent any child from being denied

coverage because he or she has a preexisting condition.  Now is not the

time to search for non-existent loopholes that preserve a broken system.”

The insurance companies quickly responded, saying that they will

comply with the new laws.  I‘m sure that‘s why they‘re paying all those

lawyers.  For more, let me bring in Wendell Potter, senior fellow on health

care, Center for Media and Democracy, and he‘s a former president of

insurance giant Cigna. 

Mr. Potter, you had predicted on this program some time ago that the

battle would continue.  Can they be trusted now that they‘ve been smacked

down early on in this?  Will they continue their efforts to wiggle through

this whole bill? 

WENDELL POTTER, CENTER FOR MEDIA AND DEMOCRACY:  No, they can‘t be

trusted.  Yes, they will continue to try to wiggle through this.  These are

the same people, by the way, that a year ago promised the president that

they would be allies with him in fighting for reform.  At the same time,

they were planning to launch their deceptive PR campaign to influence

public opinion against reform. 

They‘ll continue to do this.  Just because the trade association said

that they‘ll play nice and they will do as the law says they should do,

each one of these companies will bear watching.  We need to watch them like

hawks to make sure they do do the right thing. 

SCHULTZ:  Does this mean that consumers are going to be treated the

same way they were treated before, and consumers ought to be ready to fight

for everything and challenge everything and challenge the authority?  Is

that what it‘s going to take? 

POTTER:  There will be more regulations.  That will be helpful.  But

consumers really will need to be vigilant to make sure that they are

watching these companies, and making sure they‘re not being mistreated and

abused, and that their claims are being denied inappropriately, or that

procedures are being denied that they should have.  Consumers and doctors

and all of us will have to be watching that very, very closely. 

SCHULTZ:  What are the next two years going to be like, do you think? 

POTTER:  I think we‘ll be seeing the insurance companies will be

trying to do everything they can to circumvent the law.  One of the things

that we need to keep on eye on coming up very soon is how they‘re going to

managing to operate under this new requirement that they have to spend so

much of premiums on medical care.  Already, we‘re seeing one of the

biggest, in fact the biggest, Wellpoint, trying to reclassify its expenses,

and move them over into the medical care side, so that its medical loss

ratio looks like it‘s better, and more in compliance with the law. 

They‘re simply moving some expenses from one place to another, almost

like lawyers do—bankers do when they‘re shifting bad loans from one

place to another, to hide it from regulators. 

SCHULTZ:  Yeah.  You know, one thing I noticed in this bill is that

there are no prohibitions on brokers.  I mean, brokers can go out—and

this is probably one of the best things private business has ever seen in

insurance.  I mean, if you‘re an insurance agent, there‘s no limits to what

you can do, what you come up with, what kind of concoction you can make for

the consumer when it comes to an exchange plan.  That‘s how I read it. 

That‘s about as free market as it gets.  Isn‘t it?

POTTER:  It‘s very free market.  This is certainly not a government

takeover of the health care system.  This is a very free-market act by all

measures.  And, yeah, the brokers, their lobbyists, the underwriters have

been treated very well with this legislation.  But again, there are good

things in this bill.  We‘ll just need to make sure that the law is followed

by these companies. 

SCHULTZ:  Do you think the insurance industry has the message now? 

There‘s a lot of Democrats out there, lot of progressives that want to go

further with a government plan.  Now, what could happen here, as I see it,

Mr. Potter—correct me if I‘m wrong—all this talk about the exchanges,

some of these companies might not get into that business.  Some of these

companies might just defiantly not offer the kind of plans to create the

competition and choices that we think they‘re going to do.  What about

that? 

POTTER:  That could, indeed, happen.  I think most of the companies

probably will want to be a part of the exchange.  They will certainly be

able to operate outside the exchange as well.  We‘ll have to see how that

works.  Plus, a lot of people will continue to be enrolled in their

employer-based plans that are exempt really from state regulation.  And

that‘s another area that we‘ll need to be mindful of in watching. 

SCHULTZ:  Mr. Potter, always a pleasure.  Great to have you on with us

tonight.  Thank you. 

POTTER:  Thank you, Ed. 

SCHULTZ:  Now let‘s turn to our panel for rapid fire response.  One

story, are Democrats and the president getting a post-health care bounce? 

Two polls show conflicting results. 

President Obama says he doesn‘t think all Tea Party protesters are

part of the fringe. 

And the RNC‘s latest sex club scandal may be the last straw for

Chairman Michael Steele. 

With us tonight, Democratic strategist Todd Webster and also radio

talk show host Heidi Harris.  All right, Heidi.  I guess what went on the

road didn‘t stay on the road when it comes to what the Republicans were

doing with their money.  How do you think Michael Steele is going to

navigate through this, if he is at all?  What do you think? 

HEIDI HARRIS, RADIO TALK SHOW HOST:  Well, listen, he‘s going to have

to find a way.  Nobody wants to see them spending their money on things

like that.  You have a responsibility, whether it‘s any corporation or any

group‘s money, to spend it the way you‘re supposed to. 

SCHULTZ:  Should he quit? 

HARRIS:  No, he shouldn‘t quit.  You can‘t be responsible for

everybody. 

SCHULTZ:  Well, I can understand that.  He can‘t be responsible for

everybody.  But if you‘re not bringing in the money, and you‘re loose with

the expenses, and you have a PR issue on your hands right now, and this is

a time when Republicans are supposed to be gaining on this horrible bill

that Obama‘s gotten through with the Democrats, wouldn‘t this be the time

for Republicans to kick it into high gear, Heidi? 

HARRIS:  Well, listen, Michael Steele has changed things from the get-

go.  Remember when he got in and got rid of a bunch of people that had been

around a long time and he wanted new ideas?  He‘s shaking things up from

the get-go.  There are going to be people who are not happy with what he‘s

done, and there are going to be people who are happy with what he‘s done. 

He‘s not condoning that kind of behavior or those kind of expenses.  Why

should he resign?

SCHULTZ:  OK.  What about it, Todd?  What about the timing of the

firing? 

TODD WEBSTER, DEMOCRATIC STRATEGIST:  Keep Michael Steele around for

as long as possible.  Let‘s also remember that the candidate who was

challenging him for the RNC chairmanship was Katon Dawson, who was a South

Carolina country club, whites only, kind of a lily white, typical

conservative person who would have been even probably less able to reach

out to other people that wanted—the Republicans want to bring into their

tent. 

So I think this is obviously very, very bad for the Republican party. 

It doesn‘t give their donors any faith in the organization that they‘ll be

able to spend the money wisely.  Frankly, for a party that wants to take

over all federal spending in the federal government, to be this loose and

irresponsible with private jets and limousines and sex clubs, I don‘t think

it gives Americans a lot of—

SCHULTZ:  I hope he sticks around for a long time.  I‘m with you.  I

think he‘s great for you guys over there, Heidi.  All right.  There‘s a

couple numbers out there showing conflicting signs about whether President

Obama is going to be getting a bump out of this.  The Obama job approval

according to the Gallup and “USA Today” is at 47 percent approval, 50

percent disapprove.  A CNN post health care poll has president at 51

percent—that‘s up five—and 48 percent disapprove. 

Heidi, which one do you want to pay attention to? 

HARRIS:  Well, you know what, I think a lot of people are upset.  Our

Tea Party last week in Searchlight, as you know, had about 20,000 people,

despite what they try to tell you.  They try to make the number low. 

People are upset about it.  A lot of people are upset about the health care

bill.  I would go with the higher disapproval rating.  I think that‘s more

accurate. 

SCHULTZ:  OK.  Todd? 

WEBSTER:  It‘s a snap shot in time.  The more important thing is the

trajectory.  If you look at the two weeks that Obama has had, in the last

two weeks, passing historic health care reform, landmark student lending

reform, a major arms deal with Russia—arms limitation deal with Russia,

he‘s in the driver‘s seat and success begets success.  It puts him in a

better position for Wall Street reform and financial regulation.

SCHULTZ:  I want you both to respond to this.  The president speaking

to Matt Lauer on the NBC “Today Show” talked about the Tea Partiers.  I

can‘t remember the last time the president got this detailed when it came

to talking about the Tea Parties. 

(BEGIN VIDEO CLIP)

OBAMA:  There‘s a part of the Tea Party movement that actually did

exist before I was elected.  We saw some of it leading up to my election,

where there were some folks who just, you know, weren‘t sure whether I was

born in the United States, whether I was a socialist. 

Then I think that there‘s a broader circle around that core group of

people who are legitimately concerned about the deficit. 

So I wouldn‘t paint in broad brush and say that everybody who‘s

involved or have gone to a Tea Party rally or meeting are somehow on the

fringe.  Some of them I think have some mainstream legitimate concerns. 

(END VIDEO CLIP)

SCHULTZ:  Todd, what do you think of that answer? 

WEBSTER:  You know, he is truly a transformative leader.  He is

gracious and classy and magnanimous.  He is showing something that

certainly Republicans have not seen in 30 years, which is real leadership. 

He‘s not impugning the motives of his political enemies.  He‘s trying to

see the best in them.  He‘s actually trying to change the tone in

Washington.  It speaks to the same way he‘s reaching out for bipartisan

consensus on health care and other issues.  It‘s real leadership. 

SCHULTZ:  Heidi, did the president just describe the 20,000 people in

Searchlight week?

HARRIS:  No, not really.  He‘s trying to, what, placate us?  We‘re not

going for it.  I want to tell you something, Ed, there were 20,000 people

out there, probably 40,000 guns, not one arrest, not one citation, not one

problem.

SCHULTZ:  I‘m not talking about arrest.  I‘m talking about what the

president said about the core group of the Tea Partiers.  Do you think he

described and has a good grasp on who these folks are out there?  Did he

mischaracterize them? 

HARRIS:  No, I don‘t.  No, I don‘t.  I think he‘s trying to placate

us.  I think he‘s upset about the fact so many people are gathering who are

not happy about him.  He ought to be thrilled.  This is a guy who made a

living—or did he make a living—as a community organizer.  He ought to

be thrilled with the Tea Party.  It‘s just a community organization, right? 

SCHULTZ:  OK.  The ones that go around threatening people.  All right. 

Now, this is a—

HARRIS:  Who threatens people, Ed?  Nobody.  Stop.  Nobody does that. 

SCHULTZ:  Heidi, wait a minute.  Did you hear some of the phone calls

that were made to Bart Stupak‘s home?  Did you hear and see on the news how

this guy in Virginia put the dress of a brother of a congressman out and

then the pipe was cut going into his home?  Propane?  That‘s violence.  You

can‘t get around that. 

HARRIS:  Were those people—

SCHULTZ:  They were Tea Partiers.  They were Tea Partiers and—

HARRIS:  The only people, Ed, at the Tea Party—no, the only people

in Searchlight who were violent or did anything wrong, vandalized property,

were Harry Reid supporters, who threw eggs at the Tea Party Express bus. 

SCHULTZ:  Heidi, you cannot deny the Tea Partiers have gone over the

top.  Here‘s another classic—

HARRIS:  No, they have not. 

SCHULTZ:  OK, that‘s your opinion.  If I come cut the propane—if I

come cut the propane line into your home, you‘re going to think that‘s

normal behavior? 

HARRIS:  OK, there‘s not one nut in every crowd?  Give me a break. 

SCHULTZ:  OK, one nut in every crowd.  It just so happens they had

posted it on the Internet.  Come on, Heidi. 

(CROSS TALK)

HARRIS:  Yeah, right. 

(CROSS TALK)

WEBSTER:  There is a problem here of a rise of right wing militant

extremist groups who are resulting to real violence.  It happened with

Timothy McVeigh, killed 160 people 15 years ago.  It is now on the rise

again. 

HARRIS:  Did Timothy McVeigh go to a Tea Party?  I must have missed

it. 

(CROSS TALK)

SCHULTZ:  Heidi, is it normal behavior for crowds to spit on a

congressman? 

HARRIS:  One person maybe.  We‘re not even sure that happened.  Is it

normal behavior for Harry Reid supporters to throw eggs at the Tea Party

bus? 

SCHULTZ:  Your answer again is one person.  Is it normal behavior to

take money out and mock a man who has a disease that put him in a

wheelchair, which happened in Ohio?  Is that normal or is that over the

top? 

HARRIS:  I‘m not defending that.  I‘m telling you that our tea party

had 20,000 people with no arrests, no incidents of any kind. 

SCHULTZ:  That‘s good.

WEBSTER:  You should be congratulated for that, for nobody shooting

anybody at a rally?  That‘s the bar that you have set for the—

congratulations. 

SCHULTZ:  I want to play this sound bite of Sarah Palin.  Here‘s what

she says about the bumper sticker. 

(BEGIN VIDEO CLIP)

SARAH PALIN, FMR. GOVERNOR OF ALASKA:  Or that bumper sticker that

maybe you‘ll see on the next Subaru driving by, an Obama bumper sticker,

you should stop the driver and say, so how is that hopey changey thing

working out for you?  And I shouldn‘t be disrespectful.  I don‘t have

anything against Subarus. 

(END VIDEO CLIP)

SCHULTZ:  The story last week was a man was in his car with his 10-

year-old daughter and had an Obama sticker on his bumper and he was rear

ended and harassed.  Now here‘s Sarah Palin, with all this visibility,

making a joke out of it.  I suppose that‘s probably the high road too as

well, Heidi.  How do you view that? 

HARRIS:  How is that a Tea Party thing, Ed?  How do you make that

leap?  What does it have to do at all with all the people at the Tea Party

who are not doing anything violent?  There are wing nuts on the right. 

There are wing nuts on the left.  I can‘t be responsible for everybody. 

Boy, I‘d like to be in charge for one day, but I‘m not. 

SCHULTZ:  OK.  You think it‘s OK for Sarah Palin to tell people to

challenge other drivers because they have a bumper sticker on their car? 

You don‘t think that‘s inciteful at all? 

HARRIS:  Come on.  She‘s making a joke.  Did she tell people to rear

end drivers with Obama stickers?  I didn‘t catch that part of the speech. 

I was there, by the way. 

SCHULTZ:  Your thoughts on that, Todd. 

WEBSTER:  Sure, there are left wing activists and right wing

activists.  The left wingers tend to chain themselves to old growth trees. 

The right wingers go out and blow up buildings or shoot people.  It is a

much—

HARRIS:  Give me a break.  The left blows up buildings and sets things

on fire. 

WEBSTER:  -- when you have elected leaders inciting violence, having

people target Nancy Pelosi and calling for Armageddon, they are inciting

right-wing militants to take to—

SCHULTZ:  Todd Webster, Heidi Harris, time‘s up.  Great to have you in

rapid fire tonight.  Tomorrow night here on THE ED SHOW, we‘re going to

talk about right wing talkers and what is their responsibility and what are

they actually saying?  Is anybody paying attention to them when it comes to

responding to some of the hateful stuff they have been saying out there? 

That‘s tomorrow night on THE ED SHOW.

Up next, nine teenagers have been charged with a multiple felonies for

bullies a student to death.  School officials knew a 15-year-old girl was

being tormented, but authorities are not pressing charges against any of

the adults.  Is that right?  We‘ll talk about it next in the playbook. 

Stay with us.

(COMMERCIAL BREAK)

SCHULTZ:  In my playbook, nine Massachusetts teenagers have been

charged with multiple felonies after being accused of taunted a classmate

so severely that she committed suicide.  NBC‘s Rehema Ellis has the

details. 

(BEGIN VIDEOTAPE)

REHEMA ELLIS, NBC NEWS CORRESPONDENT (voice-over):  South Hadley High

School is in a Massachusetts college community known for good schools.  But

today people are asking why the school failed to protect one student from

being tormented to death by several others.  Fifteen-year-old Phoebe

Prince, an Irish immigrant, was found by her younger sister hanged in a

closet in her home.  She committed suicide after months of what prosecutors

called unrelenting bullying that became intolerable. 

ELIZABETH SCHEIBEL, MA NORTHWESTERN DA:  From information known to

investigators thus far, it appears that Phoebe‘s death on January 14th

followed a tortuous day for her, in which she was subjected to verbal

harassment and threatened physical abuse. 

ELLIS:  Now, nearly 11 weeks after her death, nine teenagers including

a group of girls, have been indicted and charged with stalking, criminal

harassment, and violating Phoebe‘s civil rights.  Two boys face charges of

statutory rape. 

(on camera):  On the day of her death authorities say the bullying

following phoebe from the halls of the high school and into the streets as

she made her way home.  At one point a can was thrown at her from a car. 

It may have been the final straw. 

(voice-over):  Authorities speculate Phoebe was targeted because she

was the pretty new girl at school.  She had gotten attention from a popular

football player, and one of the alleged tormenters was jealous.  Despite

pleas of help from Phoebe‘s parents, she was harassed on Facebook, her cell

phone, but mostly at school. 

SCHEIBEL:  Phoebe‘s harassment was common knowledge to most of the

South Hadley High School student body.  The investigation has revealed that

certain faculty, staff and administrators of the high school also were

alerted to the harassment of Phoebe Prince before her death. 

ELLIS:  Experts say it‘s painfully familiar. 

PARRY AFTAB, BULLYING EXPERT:  We consider it a rite of passage. 

Everyone says it‘s just bullying; it‘s words; who cares if someone shoves

you into the locker?  We‘re now seeing more and more teens who are taking

their lives as bullying becomes constant. 

ELLIS:  Sadly, even after her death, officials say Phoebe‘s bullies

persisted, sending disparaging remarks to her Facebook memorial page, an

unthinkable last torment. 

Rehema Ellis, NBC News, New York. 

(END VIDEOTAPE)

SCHULTZ:  The Massachusetts legislature is working on a new law that

would require school staff to report cases of bullying.  Let me bring in

Dr. Joseph Wright, senior vice president of the Child Health Advocacy

Institute at Children‘s National Medical Center in Washington, D.C. 

Dr. Wright, you know, how can school officials not know this is going

on?  Every parent in America is asking that question tonight. 

DR. JOSEPH WRIGHT, CHILDREN‘S NATIONAL MEDICAL CENTER:  Yes, Ed.  This

is a very troubling situation in South Hadley.  And the problem is that we

are at a cross roads where the issue of bullying is one that is based on a

generational experience.  And many adults have grown up where bullying was

considered a normative right of passage and the behaviors that constitute

bullying were really not addressed.  And—

SCHULTZ:  Do we need a law to take care of this, doctor? 

WRIGHT:  Well, you know, many states are, Ed, seeking legislative

solutions to begin to track and to really force the issue of monitoring

what‘s going on in the schools with regard to bullying behavior.  That‘s

certainly a first step.  But really it‘s an issue of awareness and

acceptance that this is a big problem. 

SCHULTZ:  Should students take a role coming forward? 

WRIGHT:  Oh, absolutely.  There has to be engagement by everybody in

the community environment.  Most of these behaviors do go on in the school

environment, so it takes students, school personnel, teachers and parents

to be involved in order to make headway with this issue. 

SCHULTZ:  Dr. Joseph Wright, thanks for your time tonight.  Appreciate

it very much. 

WRIGHT:  Thank you, Ed.

SCHULTZ:  Up next, the latest on Hannity‘s charity scandal.  Stay with

us.

(COMMERCIAL BREAK)

SCHULTZ:  Finally tonight on THE ED SHOW, it‘s been 12 days since Sean

Hannity still hasn‘t answered the questions about possible fraud and misuse

of funds from his charity.  He may have to answer to the IRS and the

Federal Trade Commission.  Hannity claims all the proceeds from his Freedom

Concerts go to a scholarship fund for the children of fallen troops. 

But look at these numbers.  In 2009, two freedom concerts brought in

more than one million dollars.  There have been more than 18 concerts since

2003.  Assuming each of those 18 concerts, say, brought in a half a million

dollars, the Freedom Alliance should have raised a total of nine million

dollars for the cause.  The other night at the talkers convention, Hannity

said they had 15 million dollars in the bank. 

Except for those tax forms, the Freedom Alliance reports it only gave

2.5 million dollars to the scholarship fund.  So Hannity‘s charity efforts

brought in nine million dollars, but only 2.5 doled out.  Which makes me

ask, where‘s the rest of the money?  The millions of dollars?  Why is it

sitting in the bank?  Blogger Debbie Schlussel, she reported that Hannity‘s

personal expenses in each concert—around each concert are about 200,000

dollars per even event, for private jets, hotel suites and luxury cars. 

Folks at the center for Citizens for Responsibility and Ethics in

Washington are also asking where is the money going?  Joining now tonight

is CREW‘s Melanie Sloan. 

Melanie, are these normal expenses for most groups like this, most

organizations like this? 

MELANIE SLOAN, CITIZENS FOR RESPONSIBILITY AND ETHICS IN WASHINGTON: 

No, their expense ratio is way out of proportion.  That‘s why the American

Institute of Philanthropy has given them either an F or a D since 2006 on

the way they spend their money.  They have very high programmatic—they

put things like fund-raising in a programmatic cost.  They spend a huge

amount of money on fund raising.

Also, I think it‘s important here that the concerts are actually put

on by a group called premiere marketing, a for-profit entity.  They‘re the

ones who collect the money and then give some small portion of those

proceeds to the Freedom Alliance for the college scholarships.  We don‘t

actually know how much money.  In 2007, it was reported that it was four

dollars a ticket.  We haven‘t seen any kind of numbers since that time. 

Whatever it is, it‘s some tiny amount. 

Most of money goes to Premiere Marketing, a for-profit company.  That,

by the way, is run by Dwayne Ward, who runs the Premiere Speakers Bureau,

which just so happens to have Oliver North, Freedom Alliance‘s chairman,

and Sean Hannity as major clients. 

SCHULTZ:  What would they be doing with 15 million dollars in the

bank?  Why aren‘t they getting it out to the students?

SLOAN:  They say they‘re saving it in a trust fund because there are

so many kids of wounded veterans who aren‘t college age yet, and they want

to grow the money. 

SCHULTZ:  OK.  That is normal with some charities that are out there. 

We‘ll have more on this story again tomorrow night.  Thanks, Melanie. 

Tonight in our phone survey, I asked do you think RNC Chairman Michael

Steele should resign?  Seventy seven percent of you said yes; 23 percent of

you said no.  That‘s THE ED SHOW.  I‘m Ed Schultz.  “HARDBALL” with Chris

Matthews starts right now on the place for politics, MSNBC.  We‘ll see you

here tomorrow night.

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