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'The Last Word with Lawrence O'Donnell' for Thursday, June 23, 2011

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Guests: Howard Fineman, Rep. Nancy Pelosi, Howie Carr, Evan Wolfson

LAWRENCE O‘DONNELL, HOST:  The Republicans walk out of the budget negotiations.  No surprise there.  But Whitey Bulger walks out with his hands up.  Talk about rockin‘ my world.

(BEGIN VIDEOTAPE)

(MUSIC)

UNIDENTIFIED FEMALE:  Big breaking news now.

ANDREA MITCHELL, NBC NEWS:  Vice President Biden‘s budget talks have stopped.

REP. NANCY PELOSI (D-CA), MINORITY LEADER:  That discussion will not take place without the House Democrats.

O‘DONNELL (voice-over):  Democrat Leader Nancy Pelosi gives me her reaction to the Republican walkout.

PELOSI:  I don‘t know how they can face the American people by saying this is what‘s really important to us, when it comes time to reduce the deficit, to give tax breaks for big oil.

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE:  A tax hike cannot pass by the U.S. House of Representatives.

LUKE RUSSERT, NBC NEWS:  Did come as quite a shock to a lot of people.

MITCHELL:  Eric Cantor said was that the president has to step in to this.

O‘DONNELL:  As Washington Republicans walk out, New York Republicans still one vote shy of marriage equality.

UNIDENTIFIED MALE:  The marriage equality bill lingers in Albany.

MITCHELL:  One vote short.

JONATHAN CAPEHART, MSNBC POLITICAL ANALYST:  Making New York the most populace state and the sixth state in the country to legalize marriage equality.

O‘DONNELL:  As New Yorkers fight for marriage equality, the president is in New York, asking for their help on his campaign.

MITCHELL:  Same supporters who are not happy with the president‘s refusal to support gay marriage.

THOMAS ROBERTS, MSNBC ANCHOR:  Manhattan fundraiser, 600 at the lesbian, gay, bisexual, and transgender leadership gala.  Consider the timing of this.

MITCHELL:  Bad bit of timing.

CAPEHART:  His position on marriage equality, on same-sex marriage, is, quote, “evolving.”

ROBERTS:  When he was just a senator, he was already evolved.

O‘DONNELL:  And Jack Nicholson played him in the movie.

But last night, the FBI got their most wanted killer without firing a shot.

UNIDENTIFIED FEMALE:  Apprehended last night by the FBI in Santa Monica, California.

UNIDENTIFIED FEMALE:  And wait until you hear how they got him.

UNIDENTIFIED MALE:  This is all about the power of television, Chuck.  The FBI has been trying to find Whitey Bulger for 16 years.

UNIDENTIFIED MALE:  Cold-blooded Irish mobster.

O‘DONNELL:  The Boston reporter Whitey Bulger wants dead joins me.

UNIDENTIFIED MALE:  More ruthless, more barbaric than anybody could have imagined.

UNIDENTIFIED MALE:  He was a double crosser.  Actually, he was a triple crosser and a quadruple crosser.

UNIDENTIFIED MALE:  Actually inspiring the Oscar-winning movie, “The Departed.”

CHUCK TODD, NBC NEWS:  Based on—

UNIDENTIFIED MALE:  The Jack Nicholson character.

JACK NICHOLSON, ACTOR:  The only one who knows what I do is me.

(END VIDEOTAPE)

O‘DONNELL:  Good evening from Washington.

With just five weeks left for the United States Congress to reach an agreement to prevent the government from hitting a catastrophic debt default, the Republicans tasked with finding a compromise today walked away from the conference.  The bipartisan debt limit and deficit reduction negotiations led by Vice President Joe Biden imploded today after House Republican leader Eric Cantor announced this morning, quote, “I will not be participating in today‘s meeting.”  Cantor said the talks had reached what he called an impasse.  The impasse, of course, was created by Cantor.

There are exactly two ways and two ways only to reduce the deficit.  One is to reduce spending.  The other is to increase revenue.  You can increase revenue by raising rates, or by eliminating tax deductions and loopholes which will also raise revenue.

The Democrats and the Republicans have had long discussions about spending cuts.  They have discussed spending cuts in every area of the budget, which is not to say that they have agreed to spending cuts in every area of the budget.  But they have discussed them.

The Democrats would now like to discuss revenue increases.  And Eric Cantor‘s response to that is to refuse to do his job, to simply walk away.  Eric Cantor is now refusing to even discuss with the vice president why he doesn‘t want to discuss taxation.

After Cantor‘s announcement, the only other Republican in the budget talks, Senator Jon Kyl, said he was pulling out too.  Kyl obviously realized that now that Cantor revealed that the secret talks had turned to taxation, he could not continue to participate without violating what is now the 21st century Republican commandment on taxation, that Republicans never think or talk about taxes or talk about why they don‘t want to talk about taxes with Democrats.

As the Republicans were defecting, House Democratic Leader Nancy Pelosi was at the White House, meeting with President Obama and Vice President Biden to try to resolve these issues.  I spoke with Leader Pelosi after that meeting in a LAST WORD exclusive, where we discussed what is off the table for House Democrats and how the president when news of Eric Cantor‘s exit broke.

(BEGIN VIDEOTAPE)

O‘DONNELL:  Democratic Leader Pelosi, thank you very much for joining me.

PELOSI:  My pleasure.  Thank you.

O‘DONNELL:  You were in the White House with the president today when Eric Cantor issued his statement, quitting the talks with the vice president on deficit reduction.  What was the president‘s reaction?  Were you surprised?

PELOSI:  Well, I hate to disappoint you, but we didn‘t have any idea.

O‘DONNELL:  They didn‘t rush in to the president and say, Eric Cantor has just quit the budget talks?

PELOSI:  Well, if they sent him a secret signal, it was unbeknownst to me.

O‘DONNELL:  Minority Leader Eric Cantor has walked out of talks with the vice president and the Democrats about how to go forward on negotiating a package of deficit reduction measures that would be included in a bill that would then be a raising of the debt ceiling.  He said it‘s the tax issue.  He said Democrats want to raise taxes.

And what he said actually in his statement is that “the tax issue must be resolved before discussions can continue.  It is time for the president to speak clearly and resolve the tax issue.”

Is he right?  Is it time for the president to speak up on taxes?

PELOSI:  Well, I think he‘s right when he says it‘s important that the tax issue be resolved.  Because while the negotiations had been proceeding in good faith and constructively by all accounts under the leadership of Vice President Biden, the discussion had largely been about cuts, but not about revenues.  And if we‘re going have a serious package about deficit reduction, we have to be talking revenues.

It‘s interesting that Leader Cantor said what he said when they are resisting—they are resisting removing tax subsidies for big oil, removing tax breaks for corporations to send jobs overseas, that kind of thing.  I don‘t know how they can face the American people by saying this is what‘s really important to us, when it comes time to reduce the deficit to give tax breaks to big oil and corporate America.

O‘DONNELL:  He also said in his statement today, “We have identified trillions in spending cuts.”  In another line, he said, “We have a blueprint to move forward to trillions of spends cuts and binding mechanisms.”

Is it your understanding that the Democrats have agreed to trillions in spending cuts already, and we don‘t have any revenue or tax items in that agreement yet?

PELOSI:  Well, first of all, one of the guiding principles was nothing is agreed to until everything is agreed to.  Second of all, I don‘t even know where the trillion dollars in cuts he‘s talking about is coming from.

But the fact is, is that you cannot cut yourself to balance.  You have to have revenue on the table.  And that is the fight we‘ll make.

I think the president has always been involved in this, in that he is—the guidance has been do no harm to the economy, which these cuts—some cuts will do harm to the growth of our economy.  That there should be -- it should be balanced.  Well, it‘s not balanced if you don‘t have revenue on the table.

So, his voice has been heard in this.  Whether we—I think these talks will resume because they must.  The U.S. government cannot default on its debt, largely accrued by President George W. Bush.  So, that‘s what this is about.

O‘DONNELL:  Let me ask you about your experience with this.  In the Congress, there have always been what we call “must-pass” bills.  You just said these talks will resume because they must.  And when that kind of statement gets made here, what is implicit in it is because all reasonable people agree that the debt ceiling must be raised.  That‘s why it has always been raised by Democrats when necessary, by Republicans when necessary.

Do you get the feeling that you‘re dealing with a different kind of Republican here, who doesn‘t really allow you to think that way, that the thing—this thing will happen because it must?  It only must to the responsible mind.

PELOSI:  Well, I trust that my colleagues are responsible.  And if not, they‘ll hear from their friends on Wall Street of the impact of defaulting on our debt will have to the markets and to our whole economy.  It‘s in a fragile place right now.  So, we certainly don‘t need this.  I think they know that.

So, I give them the benefit of the doubt.  I don‘t know if that speaks for everyone in their caucus, but it certainly should speak for their leadership, that they know the responsible thing to do.

I think it‘s important for the American people to know that this is about not defaulting on the previous debt.  This is not about increasing the debt ceiling so we can have accelerated spending.  And I think they are trying to sell it as they just want to raise the debt limit so they can spend more.

No, we don‘t.  We want to spend less.  We want to reduce the deficit.  We want to make careful changes in our investment so that we are building for the future.

O‘DONNELL:  So, Eric Cantor is saying he is walking out of the talk because the Democrats now want to talk about taxation, and he doesn‘t even want to talk about it.  He only wants to talk about spending cuts.

And then he says he wants the president to come out and talk about taxes.  In other words, the game he is playing is I‘m walking out to try to force the president to go out there and make a speech saying, this is exactly how I want to raise your taxes, so then we Republicans can attack that.

PELOSI:  It‘s an interesting tact.  It doesn‘t happen to be valid because the point is, is that we‘re willing to have a balanced package.

They‘re not.  They‘re not.  They don‘t want to talk about taxes.

But it‘s interesting that they—I knew, and we all said, what they‘re going to do is say, even though we can agree on certain cuts, you won‘t go for them unless we raise taxes for the American people.  No, we‘re not.  We‘re just saying to make our tax system fair so everyone pays their fair share.

But, actually, it should be turned upside down.  It should be the Republicans care more about tax cuts for corporations send jobs overseas, big tax subsidies to big oil, tax cuts for the wealthiest people in our country, and they want to hold our Medicare recipients and others hostage to all of that.  They—that is the problem.

But rather than getting into a tit-for-tat, the fact is, we have to cuts on the table, we have to have revenue on the table, we have to have some element of growth.  And we are not supporting any package that has cuts and benefits for Medicare beneficiaries.

O‘DONNELL:  We‘ve just learned as we‘ve been sitting here that Harry Reid has announced that the talks will resume, the budget talks that Eric Cantor has walked out of, will resume, with Harry Reid, with John Boehner, and President Obama.

So, has Eric Cantor, in effect, gotten his wish?  He‘s gotten to walk out and say I personally refuse to discuss taxes, and he is leaving the Republican speaker, John Boehner, to apparently discuss taxes—

PELOSI:  Sounds like that, doesn‘t it?

O‘DONNELL:  -- with the president and with the Senate leader.

PELOSI:  It sounds like that.  But I will tell you this.  That that discussion will not take place without the House Democrats being at the table.

O‘DONNELL:  Are you going to insist that the president include Democratic representation from the House?

PELOSI:  Well, I don‘t think there‘s any question about that.  I think that Harry was speaking figuratively.  I think he was excluding, I think—he was saying I‘m going to be at the table and Boehner is going to be.  He wasn‘t making any announcement about what the next negotiation would be.  He just meant that because Harry‘s—the Senate Republican left, and Boehner‘s person left, that then he would be the person speaking for the Senate, and that Boehner would be speaking for the House Republicans.

But that‘s neither here nor there.  That‘s minor league.  What is major is that we have to get the job done.

And while we can assign blame for how we got to this place, which is a very clear path, from the Bush administration, but let‘s not go there, and -- 

O‘DONNELL:  Oh, you can go there.  Please feel free to go there.

PELOSI:  Well, just keep in mind that when President Clinton was president of the United States, his last four budgets were in balance or in surplus.  That he had his own trajectory at $5.6 trillion.

O‘DONNELL:  And the economy was roaring along with tax rates higher in every single income tax bracket.

PELOSI:  Every single bracket and job creation of over 20 million jobs.  And then President Bush came in, and reversed that.

It was one of the biggest swings in fiscal change in the history of our country, two unpaid for wars.  That would be over time.  Tax cuts for the wealthiest people in our country.  And a prescription drug bill that gave away the store to the pharmaceutical industry at the cost to the taxpayer and the consumer.

And so, with that, we grew this enormous deficit, and the idea that tax cuts were going to create jobs simply wasn‘t true.  There were—in President Obama‘s second year, more jobs were created in the private sector than in the eight years of the Bush administration.  So, all this tax cut business is going to create jobs didn‘t.

Now, we don‘t—nobody wants to be raising taxes.  But we have to have fairness in the tax code and we have to have the middle class, the great middle class sustained, so they have confidence.  And those who aspire to the middle class, they have confidence.

And so, they exercise their purchasing power which again injects demand to the economy to create jobs.  The fact is we have a Republican majority in the House, and you need 60 votes in the Senate, and we have a Democratic president of the United States, thank God, and we will work something out that has, again, balance and bipartisan as we go forward.

But we will not support Medicare—any change in Medicare, that reduces benefits for our seniors and others who avail themselves of Medicare.  The Republican budget as you know—the Republican budget repeals Medicare, makes seniors pay more, perhaps $6,000 a year, while they have fewer benefits—while they give tax breaks and big subsidies to big oil, tax breaks to corporations sending jobs overseas.

You know, the poor priorities that almost shameful priorities that they have in their budget.

O‘DONNELL:  Democratic Leader Nancy Pelosi, thank you very much for joining me.

PELOSI:  My pleasure.  Thank you.

(END VIDEOTAPE)

O‘DONNELL:  Tonight, Vice President Biden issued a statement on the Republican defections from the bipartisan negotiations that he has been leading.  Quote, “The next phase is in the hands of the leaders.  As the president and I have made clear from the beginning, the only way to make sure we begin to live within our means is by coming together behind a balanced approach that finds real savings across the budget—including domestic spending, defense spending, mandatory spending, and loopholes in the tax code.”

Coming up: what will President Obama and Harry Reid have to do to get a compromise on the debt with Republicans?  Howard Fineman is here next.

And they got Osama bin Laden—when they got Osama bin Laden, this man became the FBI‘s most wanted killer.  He was in hiding for 16 years, and they found him yesterday in my neighborhood, within walking distance of my home.

There are neighborhoods in Boston where getting Whitey Bulger is bigger news than getting Osama bin Laden was.  I grew up in one of those neighborhoods.

And later, the Boston reporter who Whitey Bulger wanted dead will join me.

(COMMERCIAL BREAK)

O‘DONNELL:  Howard Fineman joins me next on the budget talks breakdown here in Washington.

And later, President Obama asks for contributions tonight from gay and lesbian New Yorkers while they are still asking him to support full marriage equality.

And getting Osama bin Laden took 10 years.  Getting Whitey Bulger took 16 years.  The FBI finally tracked him down, and in the process reminded us of the FBI‘s greatest embarrassment, the criminal FBI agent who tipped off Whitey Bulger that they were closing in on him 16 years ago.

There is shock in the streets of some Boston neighborhoods tonight, where no one believed they would ever find Whitey Bulger.  And there is even more shock in the beach front homes of Santa Monica, California, where they did find Whitey Bulger.  Count me among the shocked.  I grew up in Boston, near Whitey Bulger, and I live now in Santa Monica, steps away from where he was hiding out.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

PELOSI:  Rather than getting into a tit-for-tat, the fact is we have to have cuts on the table, we have to have revenue on the table, we have to have some element of growth.  And we are not supporting any package that has cuts in benefits for Medicare beneficiaries.

(END VIDEO CLIP)

O‘DONNELL:  Joining me now is Howard Fineman, MSNBC analyst and editorial director for “The Huffington Post.”

Thanks for joining me tonight, Howard.

Howard, I read the Cantor move as—you guys want to talk about taxation?  I will not discuss it with you.  I want the president of the United States to go out publicly and make a speech telling us exactly what he wants in taxes so that we can then attack that.

HOWARD FINEMAN, MSNBC POLITICAL ANALYST:  I think you‘ve got it exactly right.  And the president won‘t do that.  But what the president will do is get involved in the negotiations directly, which secondarily is what the Republicans want.

By the way, when we were listening to Nancy Pelosi there, she drew the line in the sand.  We want no cuts to Medicare, Social Security.  Keyword: cuts.

What that really means in translation is when this deal is done, and it‘s going to get done, there will be some slowing of growth.  There may be some additional taxation, a means-testing of Medicare, et cetera, et cetera.  There is room to maneuver in there as firm as she sounded.

O‘DONNELL:  Well, there are plenty of things you can do in Medicare that don‘t go to the beneficiaries.

FINEMAN: Yes. Right.

(CROSSTALK)

O‘DONNELL:  Democrats did a couple of hundred billion in 1993.  Clinton‘s first act on Medicare was to cut it substantially, without hitting beneficiaries.

Where do we go from here?  Cantor has walked out.  Is Boehner really going to go in alone and have the burden alone of talking about taxation with the president, with Democrats?

FINEMAN:  Well, initially, I think he will.  I think he will.  I think they are playing a sort of bad cop and worse cop routine here, where Boehner, the golfing buddy -- 

O‘DONNELL:  No show cop.

(CROSSTALK)

O‘DONNELL:  And the cop who is here but he is not allowed to discuss it.

FINEMAN:  The one who‘s eating the donuts in the car.

O‘DONNELL:  Yes, yes.

FINEMAN:  You know, Boehner will be the guy with the donuts.  And he‘ll be going in and he‘ll be sitting and listening to the president and he‘ll get the president to say whatever he‘s going to say about closing loopholes or raising taxes, whatever.  Then they‘ll run out and denounce that.  And then Eric Cantor will be the no-show guy who will say we will not stand it, we will not stand for it, we will not stand for it.

In the end, interestingly, Lawrence, I think the problem on the Republican side is not going to be where we‘re looking.  It‘s not going to be Eric Cantor and it‘s not going to be John Boehner.

It‘s going to be Mitch McConnell, the Republican guy in the Senate, who‘s got sort of veto power with filibustering and whatnot, who is desperate to get a Republican majority in the Senate, who is going to be the problem here.  And we haven‘t even considered him yet.  But he is lying in the weeds over on the side.

O‘DONNELL:  And people have not been paying enough attention to Nancy Pelosi.  She doesn‘t like the way some of these discussions been going on without her.

Howard Fineman of MSNBC and “The Huffington Post”—thanks for joining me tonight.

FINEMAN:  Thank you, Lawrence.

O‘DONNELL:  Still ahead: President Obama makes his case to his gay and lesbian supporters in New York tonight as he continues to face the question has he done enough to get their vote.

And the most wanted man in America is behind bars tonight -- 81-year-old gangster, murderer, sociopath and brother of one of Boston‘s most powerful politicians, has been captured after 16 years in hiding.

I never knew Whitey Bulger, but I grew up close to him in Boston. 

And it turns out, he was growing old very close to my house in California.

(COMMERCIAL BREAK)

O‘DONNELL:  Still ahead in this hour—Republicans have called Congressman Paul Ryan a rising star.  In national polls, his star power is right up there with Sarah Palin and Newt Gingrich.  Paul Ryan is in tonight‘s “Rewrite.

And next, Whitey Bulger is wanted for 19 murders, but he wanted to kill a lot more people than that.  One of them, Boston reporter Howie Carr, who has written two books about Bulger, the number one name on the FBI‘s most wanted list—until yesterday when Bulger was captured steps away from my home.

This one‘s personal for me.  No one knows more about Whitey Bulger than Howie Carr.  Howie will join me for this uniquely Boston story.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

JACK NICHOLSON, ACTOR:  You saw fit?  When I tell you to dump a body in the marsh, you dump him in the marsh.  Don‘t laugh!  This ain‘t reality TV!

(END VIDEO CLIP)

O‘DONNELL:  “You dump him in the marsh.”  Imagine my shock when I woke up this morning to find that the FBI‘s most wanted man has been a neighbor of mine twice.  In “the Departed,” Jack Nicholson was playing a character based on the south Boston gangster James Whitey Bulger. 

Whitey Bulger was wanted for 19 murders, having lived a life of crime, while his little brother, in an only in Boston twist, was working his way up to becoming the president of the Massachusetts Senate.  The brothers Bulger were lucky enough to grow up in a neighborhood where having a killer in the family wouldn‘t really hurt you when you‘re running for state senate. 

I grew up not far from that neighborhood, where only two of my friends had a murdering gangster in the family.  And none of us held that against anyone else in the family.  When I left my neighborhood and went to college about 10 miles away at the other end of my subway line, I never again met anyone who has a gangster in the family. 

Gangsters became the stuff of movies, where they are romanticized, but they could never be romanticized to me.  The man on the run has always been an irresistible story for Hollywood.  So if Martin Scorcese had never gotten around to some version of the Whitey Bulger story, someone else surely would have. 

For 16 years, Whitey has been on the run.  For 16 years, his politician brother has refused to answer any questions about his brother, the killer.  Whitey Bulger went into hiding after a corrupt FBI agent named John Connelly, the inspiration for Matt Damon‘s character in “the Departed,” tipped off Bulger that he was about to be indicted on racketeering charges. 

Over the years, the FBI pumped the reward money offered for Whitey Bulger all the way up to two million dollars.  And when Osama bin Laden was killed last month, the Boston boy was moved up to number one on the FBI‘s 10 Most Wanted List, until yesterday, when he was finally captured. 

FBI agents say they were acting on a tip, phoned in to them Tuesday night, when they began staking out an apartment where they thought Bulger was hiding.  Yesterday afternoon, the FBI used what they are calling a ruse to convince Bulger to come outside where he was placed under arrest without anyone firing a shot. 

Whitey hasn‘t found where his—Whitey wasn‘t found where his Boston accent would blend in.  He was found 2,500 miles away from his old neighborhood, in my—near my old neighborhood.  Whitey Bulger, the most wanted man in Boston history, and the most hated gangster in Boston history, was found within walking distance of my home in Santa Monica, California. 

It turns out I was living closer to Whitey during his fugitive years than I was when he was a free man in Boston.  Whitey‘s been living there for exactly the same amount of time as I have, 15 years.  I have driven by his apartment more times than I can ever count.  I have walked past it. 

And I may have seen this couple many times, and I never would have looked twice.  I never would have realized I was looking at Whitey Bulger and his girlfriend, Catherine Grieg (ph).  WCVB television in Boston obtained this photo taken after they were taken into custody. 

Whitey is now 81.  She is now 60 and faces charges of harboring a fugitive.  KNBC found Jack Baker, originally from South Boston, who now lives in Santa Monica, who had this reaction to the arrest of Whitey Bulger. 

(BEGIN VIDEO CLIP)

JACK BAKER, BULGER NEIGHBOR:  It‘s absolutely amazing to me that he was living in Santa Monica, California, I mean, you know, two blocks from the Third Street Promenade.  And selfishly, I have a new baby.  I‘m a little missed I didn‘t find him myself. 

Obviously, now, you‘re just—I walk my dog in this neighborhood.  I‘m starting to think, my God, I wonder if I ever passed him.  I wonder if our dogs ever played together. 

(END VIDEO CLIP)

O‘DONNELL:  Joining me now, Howie Carr, columnist for “the Boston Herald,” and author of two books on Whitey Bulger, “the Brothers Bulger,” and his latest, “Hitman.”

Thank you for joining me tonight, Howie.

HOWIE CARR, AUTHOR:  Thanks for having me, Lawrence.

O‘DONNELL:  Howie, the FBI said that they felt—they put out this ad campaign recently.  They started doing ads in a few television markets around the country, especially targeting women‘s programming, putting up pictures of Whitey.  But also, most importantly, pictures of the girlfriend, trying, in effect, to say to women, if you have seen either one of these people, especially if you‘ve seen this girlfriend, please let us know. 

The FBI today is claiming that that is exactly how they found him. 

They are claiming that the tip they got was a result of this ad campaign. 

What do you think? 

CARR:  You know, there‘s a lot of suspicion in Boston that this was a setup job.  You know, back in the 1950s and ‘60s, when J. Edgar Hoover was making the FBI the respected organization it used to be, oftentimes they would find a fugitive and basically have his house surrounded, and then put out a press release saying he was on the top 10 most wanted list.

And 10 minutes later, he‘d be arrested.  And everyone would say, gee, what a great job the FBI did.  This sort of has faint echoes of that old-time FBI operation, doesn‘t it? 

O‘DONNELL:  It does.  How are your listeners reacting to this?  You know, the Boston listeners, your show and just Boston people in general, they don‘t take stories like this at face value.  They don‘t take the idea that Whitey has been hiding for 16 years, rumored to be in Europe, rumored to be all over the world, in all sorts of different strange places, and here he is found, you know—I don‘t know—about seven miles from the nearest federal building where the FBI has offices. 

I suspect that there‘s a lot of suspicion in your radio audience today about how this happened. 

CARR:  Yeah.  Our poll question today was, do you think the FBI knew where he was before they put the public service announcements on the air?  And they came back 82 percent did think they knew where he was. 

I mean, the ads were running in California on San Francisco and San Diego markets, but they weren‘t running in L.A.  So, I mean, who saw this? 

And you just showed the picture of Whitey and Catherine Grieg.  They don‘t look like the pictures on the wanted poster.  They look like Mr. and Mrs. Santa Claus, you know?  American gothic, missing the pitch fork. 

O‘DONNELL:  And L.A. would be the most expensive TV market to put those ads in.  So maybe they wanted to skip it.  But that‘s what I love about the Boston audiences.  The FBI can say whatever they want, and you guys are going to sit there and go, OK, prove it to me. 

Howie, let‘s talk about why the FBI doesn‘t exactly have the highest level of credibility in Boston, starting with John Connelly. 

CARR:  Well, John Connelly was a neighbor of Whitey and Billy Bulger in South Boston.  And he got on the FBI through U.S. House Speaker John McCormack back in the 1960s, who was also a close ally of the Bulgers.  People don‘t remember John McCormack nowadays, but he was first in line for the presidency after JFK was shot. 

And John Connelly was kind of a protege of Billy Bulger, the Senate president.  And he always took care of Whitey.  And he made him a top echelon informer.  They were trying to make Whitey a top echelon informer, on direct orders of J. Edgar Hoover as early as 1970.  And we think that that probably—that request probably came from McCormack, to protect him by making him an informant. 

So Connelly eventually just sort of became more and more enamored of my Irish, as he called the gang, and Whitey in particular.  And he eventually pretty much joined the gang.  And he tipped them off.  And he received huge amounts of money from Whitey over the years.  It‘s kind of like “Goodfellas,” where Robert Deniro has to tell his gang after the Latanza (ph) robbery to stop spreading the money around. 

John Connelly was spreading it around.  And John Connelly, by the way, has since been convicted of racketeering, working on behalf of Whitey Bulger‘s mob.  And this week, he‘s going to be transferred from Buckner, North Carolina, where he has been serving a federal prison sentence with Bernie Madoff, down to Florida, where he‘s been convicted of second degree murder. 

He is looking at 40 years in prison.  And he‘s probably going to be the second Boston FBI agent to die in prison.  H. Paul Rico (ph), another guy who knew Whitey very well, was arrested for a murder in Tulsa, Oklahoma, and died in a prison hospital about three or four years ago. 

O‘DONNELL:  You know, Howie, as I said in the introduction, John Connelly was the idea for the Matt Damon character in “the Departed,”  And it‘s really very, very similar.  Growing up in the neighborhood, the Whitey Bulger neighborhood, getting into the FBI.  It reads like, you know, a very long plan, life plan to get this guy in there. 

I got to tell you, I was in court.  I saw John Connelly testify when he was considered an absolute straight FBI agent.  And in the courtroom in Boston, in the federal courtroom, nobody could crack him.  No one could come close to making him seem like anything but the most credible of FBI agents at the time. 

And it was a shock not just to Boston but to the FBI institutionally to discover they had somebody this dirty.  Do you think that had anything to do—and I know in Boston there is this suspicion that the FBI wasn‘t looking for Whitey Bulger very hard, because they didn‘t want the John Connelly story coming back up. 

CARR:  Well, I think it was starting to percolate to the surface when Whitey left town.  And, again, John Connelly wasn‘t the only corrupt agent in Boston.  There was that guy who died in Tulsa, H. Paul Rico.  There was another guy who testified he received 7,000 dollars from Whitey.  Whitey, all together, gave quote, unquote, gratuities to at least 14 agents in the Boston office. 

And he had a saying at Christmas, when he would be sitting in the back of his liquor store, putting all the cash in envelopes.  He said Christmas is for cops and kids.  And the FBI gave him good value in return.  They took out first his allies in the non-mafia gang, the Winter Hill Game. 

After they were eliminated in a race fixing case that—where Whitey was just an unindicted co-conspirator, then they moved against the Mafia.  And they listed Whitey as one of the informants on the wiretap.  So, of course, that meant that they couldn‘t prosecute Whitey, no matter what evidence turned up when they were bugging the Italians in the North End. 

They took very good care of Whitey Bulger. 

O‘DONNELL:  Howie, I have one Whitey story that you haven‘t heard, because it comes from a friend of mine who went out on a date with Whitey in the 1960s.  So we‘re talking, you know, four decades ago or more.  She is still afraid of Whitey right now, tonight.  Doesn‘t want me to tell this story. 

Went out on a date with him.  He pulled the car over at Tinnian (ph) beach, and he basically asked for sex.  She immediately tried to get out of the car.  He pulled a gun.  She jumped out of the car and ran.  That‘s the last time she ever saw Whitey Bulger.  And she‘s lived a very happy life since then. 

But she lives in fear of that story being told tonight, even with Whitey in custody, because this guy is not some romantic Bonnie and Clyde figure.  This guy really is a sociopath who was extremely dangerous with every breath he took. 

Just give us—finish up for us, Howie, with who this guy really was, what kind of criminal this guy really is. 

CARR:  He killed 19 people.  His partner in the mob was a guy named Steve Flemmy (ph).  Steve Flemmy had problems with two girlfriends, both of them named Deborah.  So Whitey strangled both of these girls with his bare hands and then chopped off their finger tips and pulled out all of their teeth, just so they couldn‘t be identified. 

Catherine Grieg, the woman he was running around with for all these years in your home town, was—she had two brothers—she was married to a Boston firefighter named McGonnagal (ph).  McGonnagal had two brothers who were in a rival faction in South Boston.  Whitey killed both of her brothers in law. 

O‘DONNELL:  And it goes on from there.  You‘ve got to read Howie‘s books.  Howie Carr, author of “the Brothers Bulger” and “The Hitman.”  Howie, thank you very much for joining us tonight.  I know everybody‘s trying to get you on every show.  I greatly appreciate you coming on. 

Thank you, Howie. 

CARR:  Thank you, Lawrence.  I appreciate it. 

O‘DONNELL:  Coming up, with New York State Senate still one vote short of making same-sex marriage legal, President Obama goes to New York City to ask the gay community for campaign cash.  We‘ll show you what kind of reception the president received. 

And the rise and fall of Paul Ryan, from conservative hero to most unpopular elected Republican in America.  That‘s in tonight‘s Rewrite.

(COMMERCIAL BREAK)

O‘DONNELL:  Time for tonight‘s Rewrite.  Since unveiling his plan to kill Medicare as we know it, Wisconsin Republican Congressman Paul Ryan has been portrayed by some as a strong, courageous Republican leader, a rising star in the party. 

(BEGIN VIDEO CLIP)

KARL ROVE, FOX NEWS CONTRIBUTOR:  Ryan is a meticulous, thoughtful, articulate, deeply informed and passionate advocate. 

DICK CHENEY, FORMER VICE PRESIDENT OF THE UNITED STATES:  I worship the ground that Paul Ryan walks on.  I think he is an enormously talented individual.  I think he‘s trying to do the right thing. 

UNIDENTIFIED MALE:  When the president says there‘s too many children up there, I think that for many of the American public, Paul Ryan looks like the adult, who actually had the courage to put forward a plan. 

(END VIDEO CLIP)

O‘DONNELL:  In the “Weekly Standard” just last month, editor Bill Kristol called the idea of Ryan running for president “the Democrats‘ worst nightmare.”

Really?  The Democrats worst nightmare?  If you‘re wondering what the polls say about that, a new survey from Bloomberg News found that just 34 percent of Americans think they would be better off under the Paul Ryan plan, while 57 percent said that things would be worse. 

And the all-important independent voters, 58 percent think that the Ryan plan is a bad idea.  As for Ryan himself, the survey found that he is the third most disliked Republican in America.  The only two Republicans more disliked than Paul Ryan, Newt Gingrich and Sarah Palin, both of whom are far better known than Paul Ryan. 

At Paul Ryan‘s much, much lower level of notoriety, it is much, much harder to get people to dislike you, because they have to know you first.  But the Ryan plan has managed to turn that trick for Paul Ryan.  Palin and Gingrich aside, it‘s hard to imagine a Republican who can tie a necktie who would be beaten more badly by President Obama in a presidential campaign than Paul Ryan. 

So political reality demands that Bill Kristol‘s headline be rewritten to “Paul Ryan: the Republicans‘ Worst Nightmare.”

(COMMERCIAL BREAK)

O‘DONNELL:  Tonight in New York, President Obama became the first sitting U.S. president to attend a campaign fundraiser with the LGBT community.  No surprise that George W. Bush never did that, but Bill Clinton never did it either in his eight years in the White House.  Outside the event, some protested against the president for not endorsing same-sex marriage. 

The long planned Obama campaign event coincidentally took place as the New York State senate stands within one vote of passing legislation that would make New York the sixth and largest state to legalize marriage equality.  The president addressed that vote tonight. 

(BEGIN VIDEO CLIP)

OBAMA:  New York is doing exactly what democracies are supposed to do.  There‘s a debate.  There‘s deliberation about what it means here in New York to treat people fairly in the eyes of the law.  And that is—look, that‘s the power of our democratic system. 

(END VIDEO CLIP)

O‘DONNELL:  Joining me now, Evan Wolfson, who is the president of Freedom to Marry, a national campaign to end marriage discrimination.  Thanks for joining me tonight, Evan. 

EVAN WOLFSON, FREEDOM TO MARRY:  Good to be with you, Lawrence. 

O‘DONNELL:  Evan, yours is a nonpartisan organization.  You watched the president‘s speech tonight.  What did you think of what he had to say? 

WOLFSON:  I think the president had a lot of important and good things to say, and he has a lot of important and good achievements to point to. 

But it‘s really what he didn‘t say tonight that left a gap, and left people

many people still unsatisfied. 

           

The president did not come out forthrightly in support of the freedom to marry, even though he has many steps to point to that he has taken that have helped solidify and build support for the freedom to marry.  And it‘s really time for the president to join the majority of Americans who now support the freedom to marry. 

O‘DONNELL:  President Obama seems to be getting more stress in this area than President Clinton ever did.  And yet President Clinton is who enacted Don‘t Ask, Don‘t Tell.  President Obama is the president who is getting rid of it.  He‘s not—the Defense of Marriage Act President Clinton signed into law.  President Obama is refusing to defend it on appeal in federal courts. 

What is the disconnect—the apparent disconnect here, between the support or the criticism also that President Obama is getting that it seems to me President Clinton never suffered? 

WOLFSON:  Well, I think, first of all, you‘re absolutely right.  This president, President Obama, has done many important things.  Moving to end military discrimination is a giant step for our country, and a matter of fairness for men and women serving our nation. 

And the president and the attorney general‘s decision and declaration that the so-called Defense of Marriage Act is unconstitutional and therefore is indefensible by the U.S. government was a very important, historic step.  And he is rightly celebrated for that. 

But at the same time, when President Clinton signed into law the so-called Defense of Marriage Act, and when the military discrimination was enacted by Congress in the ‘90s, the country was in a very, very different place than it is today.  And President Obama has himself acknowledged that. 

The country, like the president, has been on a journey in which people have talked about why marriage matters.  People have seen loving and committed couples who seek to participate in the freedom to marry.  And we now have five states and the District of Columbia, with New York potentially about to add to that number, and in fact doubling the number of Americans where—who live in a state where gay people share in the freedom to marry. 

If New York passes this bill, it will be going from 16 million to 35 million.  So the country today is just not in the same place.  We now have a majority in favor of the freedom to marry.  And people look to this president to show the leadership, to stand up for the justice and inclusion that many people actually really believe he does indeed support. 

O‘DONNELL:  Evan Wolfson, president of Freedom to Marry, thank you very much for joining us tonight. 

WOLFSON:  Thank you. 

O‘DONNELL:  You can have THE LAST WORD online at our blog, TheLastWord.MSNBC.com.  You can follow my tweets @Lawrence. 

END   

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