updated 11/10/2011 3:55:47 PM ET 2011-11-10T20:55:47

Guests: Steve Schmidt, Alex Wagner, Michael Moore, Steve Schmidt, Jack Abramoff

LAWRENCE O`DONNELL, HOST: The CNBC Republican presidential debate has
just ended and we have a loser.

(BEGIN VIDEOTAPE)

(MUSIC)

MARIA BARTIROMO, CNBC/MODERATOR: Here, we`re focusing on character
and on judgment. You`ve been a CEO.

HERMAN CAIN (R), PRESIDENTIAL CANDIDATE: Yes.

UNIDENTIFIED FEMALE: Why should the American people hire a president
if they feel there are character issues?

CAIN: The American people deserve better than someone being tried in
the court of public opinion based on unfounded accusations. That`s what
that`s about.

(CHEERS AND APPLUSE)

CAIN: Over the last nine days, the voters have voted with their
noggins, and they`re saying, they don`t care about the character
assassination, they care about leadership.

JOHN HARWOOD, CNBC/MODERATOR: Would you keep him on if you had bought
his company?

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: I -- I`m --

(BOOS)

ROMNEY: Herman Cain is the person to respond to these questions. He
just did.

HARWOOD: You said, no, let Detroit go bankrupt. Now that the
companies are profitable again, you said, well, actually, President Obama
implemented my plan all along. With a record like that, of seeming to be
on all sides of the issue, why should Republicans be confident in the
steadiest of your economic leadership?

ROMNEY: Whether it was by president bush or by President Obama, it
was the wrong way to go.

HARWOOD: Your opponents have said you switched positions on many
issues. You seem to have encapsulated the last debate when you said, "I`m
running for office, for Pete`s sake."

ROMNEY: I`m a man of steadiness and constancy. I don`t think you`re
going to find somebody who has more of those attributes than I do. I`ve
been married to the same woman for 25 -- excuse me, I`ll get in trouble --
for 42 years. I`ve been in the same church for my entire life. I worked
at one company, Bain, for 25 years.

HARWOOD: Let me switch back to the economy.

GOV. RICK PERRY (R-TX), PRESIDENTIAL CANDIDATE: It`s the regulatory
world that is killing America.

CAIN: Until we throw out the tax code and put in something bold, get
government out of the way by reducing the regulatory environments.

HARWOOD: Speaker Gingrich, 30 seconds to you. Your firm was paid
$300,000 by Freddie Mac in 2006. What did you do for that money?

NEWT GINGRICH (R), PRESIDENTIAL CANDIDATE: Are you asking me? I have
never done any lobbying. Every contract that was written during the period
when I was out of the office, specifically said I would do no lobbying and
I offered advice. It`s sad that the news media doesn`t report accurately
how the economy works.

BARTIROMO: What is the media reporting inaccurately about the
economy?

GINGRICH: What?

(MUSIC)

(END VIDEOTAPE)

O`DONNELL: The CNBC Republican presidential debate tonight included a
meltdown moment, the likes of which we have never seen in a presidential
debate.

(BEGIN VIDEO CLIP)

PERRY: It`s three agencies of government when I get there that are
gone. Commerce, education, and the -- what`s the third one there? Let`s
see.

(LAUGHTER)

REP. RON PAUL (R-TX), PRESIDENTIAL CANDIDATE: You mean five?

PERRY: Oh, five, OK. So commerce, education and the -- um?

PAUL: EPA?

PERRY: EPA, there you go.

HARWOOD: Seriously? Is EPA the one you were talking about?

PERRY: No, sir. No, sir. We`re talking about the agencies of
government -- the EPA needs to be rebuilt, no doubt about that.

HARWOOD: But you can`t name the third one?

PERRY: The third agency of government? I would do away with
education, the -- commerce. And let`s see -- I can`t. The third one I
can`t. Sorry. Oops.

(END VIDEO CLIP)

O`DONNELL: I said at the end of Rick Perry`s first debate that he had
destroyed his candidacy by attacking Social Security. He could not
possibly beat President Obama by attacking Social Security if he ever got
to be the nominee and he probably couldn`t win the Republican nomination
with that attack on Social Security.

Tonight, he just lost all hope of even being considered for the vice
presidential nomination. The party cannot afford to send that man into a
debate with Joe Biden.

Joining me now is MSNBC analyst Steve Schmidt. He is the former
senior adviser to the McCain/Palin campaign, and a senior strategist in the
Bush/Cheney `04 campaign. And MSNBC political analyst and future MSNBC
host, Alex Wagner.

Thank you both for joining me tonight.

Steve, you`ve seen a lot of these debates. I -- there`s never been a
moment in my lifetime, in the history of televised presidential debates, as
what we just saw happen with Rick Perry. He`s got these three agencies of
government he absolutely wants to close down when he becomes president.
Just can`t remember that third one.

STEVE SCHMIDT, MSNBC ANALYST: Yes. I think it`s over for him. I
think his campaign effectively ended tonight. It`s just an extraordinary
moment, the likes of which we have never seen before in a presidential
debate.

He had fallen off the radar screen. He`s fallen to Michele Bachmann
levels in the race, but I think it`s over tonight with that.

O`DONNELL: Yes. He had collapsed in the polls, Alex, but when you
look at that stage, there`s a bunch of people who absolutely can no be on a
ticket. Newt Gingrich, Ron Paul, Michele Bachmann.

And so, by process of elimination, even though Perry`s numbers were
very bad, he was still in it, theoretically. He was still somebody, since
he was elected governor, could conceivably end up on a ticket. That`s
gone.

ALEX WAGNER, MSNBC POLITICAL ANALYST: It`s hard to be more
underwhelming than by the people he was surrounded by. That`s something
akin to wetting your pants on the last day of school. I mean, there is no
reprieve for Rick Perry, especially, ironically, on energy, which is
something he has hammered over and over and over.

O`DONNELL: Well, it turns out, 20 minutes later, he was thinking of
the Department of Energy. He finally got that out. Here he is, the
governor of Texas, the oil business centered there, and he couldn`t
remember, oh, yes, that department that regulates my big industry, I want
to get rid of that.

WAGNER: It was one of those white-knuckled moments where you could
almost hear him saying, line, line. It was painful to watch.

But once you have the pity of the American public, you`ve also lost
their vote.

O`DONNELL: And, Steve, this is one of those debates everybody was
watching just to see, how is Herman Cain going to handle it?

SCHMIDT: Sure.

O`DONNELL: And also, not just how is he going to handle it, but how
is it going to come up? It wasn`t clear to me in a CNBC economics debate
basically, how you could bring this up. But let`s see exactly how it did
come up in the debate.

(BEGIN VIDEO CLIP)

BARTIROMO: Here we`re focusing on character and on judgment. You`ve
been a CEO.

CAIN: Yes.

BARTIROMO: You know that shareholders are reluctant to hire a CEO
where there are character issues. Why should the American people hire a
president if they feel there are character issues?

CAIN: The American people deserve better than someone being tried in
the court of public opinion based on unfounded accusations. That`s what
that`s about.

(CHEERS AND APPLAUSE)

CAIN: And I value my character and my integrity more than anything
else. And for every one person that comes forward with a false accusation,
there are probably -- there are thousands who would say, none of that sort
of can activity ever came from Herman Cain.

You were right. This country`s looking for leadership. And this is
why a lot of people, despite what has happened over the last nine days, are
still very enthusiastic about my candidacy. Over the last nine days --
over the last nine days, the voters have voted with their dollars, and
they`re saying, they don`t care about the character assassination. They
care about leadership and getting this economy growing and all of the other
problems we face.

(END VIDEO CLIP)

O`DONNELL: Steve, that was it. Just one question to Herman Cain
about it. How did he handle it?

SCHMIDT: Well, I thought he handled it terribly. And I thought his
campaign effectively ended yesterday with that news conference, 30 minutes
of nonsense talk with a healthy dose of conspiracy theories thrown in on
top of it, a conspiracy between Rick Perry, the Democrats, and the media.
I think these are extreme charges, and it was an extraordinary moment, when
someone who is accused by four women of sexual harassment, when he refers
to Speaker Pelosi as Princess Pelosi. How degrading and contemptible his
attitude towards, you know, women.

I just thought it was an extraordinary moment. I thought in a poker
game, I thought it was a big tell. And I disagree with Nancy Pelosi on
nearly everything, but she earned that title. And his contempt that he
showed towards her, I just thought it was bad, thought it was a big tell,
and I think Herman Cain is going to lose ground rapidly in this race, you
know, in the next couple of weeks.

O`DONNELL: Alex, he referred to Nancy Pelosi as Princess Pelosi later
in the debate on a health care question.

But there was one more round where John Harwood tried to reignite this
question of the Cain sexual harassment by putting this question to Mitt
Romney. Let`s listen to this.

(BEGIN VIDEO CLIP)

HARWOOD: Would you keep him on if you had bought his company?

ROMNEY: I -- I`m --

(BOOS)

ROMNEY: Look, look, Herman Cain is the person to respond though these
questions. He just did to the people in this room and across the country,
they can make their own assessment. I`m not going to --

(APPLAUSE)

HARWOOD: Governor Huntsman, let me switch back to the economy.

(CHEERS AND APPLAUSE)

(END VIDEO CLIP)

O`DONNELLL: The debate audience has spoken, the ones in the room.
They don`t want to hear a word about this.

WAGNER: Well, look, the idea was this was going to be focused on
economic policy, but at the end of the day, this is a huge news story. And
I think it was only appropriate that they asked Herman Cain about it.

My favorite Herman Cain line of the night was when he said, "For every
woman who has accused me of sexual harassment, there are thousands who have
not," which is the same argument a serial killer could use. For every
person I have killed, there are thousands of people I have not killed.

I mean, this is not -- this is not cogent, this is no coherent. This
is not -- this is not someone who should be president.

O`DONNELL: Steve, we normally think of primaries as the process that
toughens up the nominee. Certainly worked that way for Barack Obama last
time around, because he was running against some very difficult
competition, obviously, in Hillary Clinton and others. I mean, Joe Biden
was a serious force on the debate stage. Chris Dodd was a serious force on
the debate stage, when he got a chance to speak.

There are no serious players on that debate stage anymore. It`s Mitt
Romney by himself. He cannot fail. And it doesn`t seem to me that this
debate process is strengthening him as a candidate.

SCHMIDT: I think one of the interesting aspects of this is the
comeback of Speaker Gingrich over the last month or so, particularly with
the collapse of Perry. He`s in third place right now. And I would expect
him to rise on the basis of the performance tonight. The further collapse
of Perry, I`d expect Cain`s numbers to come down.

But we may well see a situation where Speaker Gingrich now is the
chief competitor to Mitt Romney going forward. And Speaker Gingrich, I
don`t believe he`ll be the nominee, but I do believe he`ll put Governor
Romney through his paces in these future debates.

As we move into the voting period and the number of people on that
stage begins to shrink, I do think that Governor Romney`s going to have
some more competition than we`ve seen so far in the race.

O`DONNELL: The MSNBC team, Steve Schmidt and Alex Wagner, thank you
both for joining me tonight.

WAGNER: Thanks, Lawrence.

SCHMIDT: You bet. The great to be with you, Lawrence.

O`DONNELL: Coming up, Michael Moore with his reaction to tonight`s
debate.

And later, America`s most corrupt lobbyist, Jack Abramoff joins me to
talk about his new book.

And the Republicans who got caught and the ones who didn`t.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

STEPHEN COLBERT, COMEDIAN: Cain was great with Jimmy. As FOX News`s
Web site declared, "Cain hits home run on Kimmel," which is impressive,
because he was only trying to get to third base. Now, none of this --

(END VIDEO CLIP)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

GINGRICH: I have yet to hear a single reporter ask a single "Occupy
Wall Street" person a single rational question about the economy that would
lead them to say, for example, who`s going to pay for the park you`re
occupying if there are no businesses making a profit?

(APPLAUSE)

(END VIDEO CLIP)

O`DONNELL: Joining now, a man who needs no introduction, but he`s
going to get one anyway, Academy Award-winning filmmaker Michael Moore and
the author of "The New York Times" best seller, "Here Comes Trouble:
Stories from My Life."

Michael, thank you very much for joining me tonight.

MICHAEL MOORE, FILMMAKER: Thank you for having me.

O`DONNELL: That was Mr. Newt Gingrich talking about "Occupy Wall
Street." He really seems to have a feel for it.

MOORE: Well, it`s amazing that here`s a movement that`s seven weeks
old and it was mentioned two or three times tonight in the Republican
debate. That`s something they used to ignore that sort of thing. So,
that`s a victory for "Occupy Wall Street."

But he -- I think he`s got it mixed up, what he said, if it wasn`t for
the corporation, there wouldn`t be a park there. I seem to remember in
America, parks are developed by the local governments for the people, by
the people, let the people pick and do things.

I don`t ever remember a corporate park.

O`DONNELL: You don`t have to buy a ticket to, you know, Grand
Central, no, Central Park and Boston Common, these places.

MOORE: Do they have to start these primaries in January? Because I
don`t want these debates to end --

O`DONNELL: You know what? We have a little subject change
possibility here. We have breaking news from Penn State, a bad week for
Penn State.

MOORE: Yes.

O`DONNELL: The trustees have just voted to oust Coach Joe Paterno,
apparently effective immediately. I gather that he won`t even be coaching
on the next game. This is a kind of shocking development this week.

MOORE: Yes. Well, this is a problem, not just with Penn State. It
started -- not started, but certainly, the Catholic Church, you and I have
talked about that.

O`DONNELL: He`s certainly of that age and that era where those men
simply didn`t know -- literally kind of didn`t know what to do about this.

MOORE: Yes. He may not even have known or understood what was being
told to him.

O`DONNELL: We`re actually going to pick up the board of trustees
right now live from Pennsylvania.

UNIDENTIFIED MALE: We did have a phone conversation. We were unable
to find a way to get to that in person without causing, we thought, greater
distraction, and that was a conclusion that we made.

REPORTER: You didn`t think you owed him the courtesy to go to his
house or talk to him in person?

UNIDENTIFIED MALE: There`s really nothing we could comment on. We
did what we thought was best?

REPORTER: What`s your decision for dismissing Coach Paterno now and
leaving Tim Curley in administrative leave?

UNIDENTIFIED MALE: There were a number of matters that the board has
to address during the course of the week, I`m not saying those will end,
but there`s a number of over time will get resolved and dealt with.

REPORTER: Will Joe`s son still be on --

UNIDENTIFIED MALE: There`s no change there at the moment. What
happens in the long-term is a different question.

REPORTER: What about Mike McQueary?

UNIDENTFIED MALE: As I said, we`re not aware of any change in his
status and there`s really no more comment we can make on that personnel
matter.

(INAUDIBLE)

UNIDENTIFIED MALE: Well, I don`t really want to get into what
individuals should think or not think. I would hope that our students and
we would hope that everyone who cares about Penn State, our 95,000
students, our hundreds of thousands of alumni, the thousands of degrees
which get awarded each year, our outreach for agriculture in every county
of the commonwealth. I would hope that what everyone would agree is what
we are doing, is what we believe is in our best judgment, in the best long-
term interest of the university, which is much larger than athletic
programs.

REPORTER: Don`t you think you`re making him the fall guy for this?

UNIDENTIFIED MALE: I think the -- people can believe what they wish,
but I think when the facts come out in the longer term, and we don`t have
them all here in front of us, and no doubt the additional facts would shed
light on things.

REPORTER: You said there`ll be a full investigation at the same time.
What do you say to those who argue that this is a rush to judgment? There
has not been a full investigation, so how can you reach this conclusion at
this time?

UNIDENTIFIED MALE: As I said, these are judgments and decisions and
balances that boards have to make with thoughtful deliberation. In our
view, things had reached a point where a change was necessary and we
thought in the best long-term interest of the university.

REPORTER: Is the board aware that it`s under the Department of
Education investigation? And what`s the larger message about how Penn
State responds to allegations of sexual abuse on campus?

UNIDENTIFIED MALE: I am just briefly aware of the matter that you
just described and have no information on it, no real knowledge of it. If
there is another investigation by a federal authority, of course, we will -
- the university will cooperate in every means possible. And beyond that,
I really have no knowledge of it. And I think as we indicated in our
statement yesterday, we intend to be as responsible as we can and make
whatever changes are necessary to insure we have the highest standards of
conduct.

REPORTER: Has Coach Paterno been told he can go to the game on
Saturday or told to stay away?

UNIDENTIFIED MALE: We did not discuss that matter.

REPORTER: You`ve talked to a lot of students over the past few days.
What do you want to say to those who think the board of trustees has
handled this matter poorly?

UNIDENTIFIED MALE: We handled it the best way we could with the
information we had and with the time that was available to us. Again,
wanting to be decisive, but also wanted to be thorough and appropriately
deliberate.

Others are welcome to their own opinion. We believe we did the best
job we could.

REPORTER: What would be the harm in letting the coach continue until
the end of the season?

REPORTER: Can you define the term "best interest of the university"
regarding Coach Paterno?

UNIDENTIFIED MALE: Not really, not for an individual. I think I`ll
leave it to you to describe what the best interest -- although I would say
that the current situation we`re in, which by all accounts, has its roots
in a certain organization of the university, the situation we are in today
is not in the university`s best interests.

REPORTER: What would be the harm in letting the coach continue until
the end of the season? What`s to be gained? Tell me specifically.

UNIDENTIFIED MALE: I`m not sure I can tell you specifically. In our
view, we thought a change now was necessary to enable -- or to allow this
process to continue. We thought it was going to be damaging the
university, and therefore we took the action we did.

O`DONNELL: And we`re back.

Michael, this is in the broad scope yet another example of what
happens to the stakes, what happens to the way people behave when big, big
money is involved. In the university system, there`s no bigger money than
the big football program that is basically a big television football
program.

MOORE: Correct.

O`DONNELL: And everything starts to get protected, because the stakes
are so high.

MOORE: The first mother of the first child that was molested or
raped, filed her complaint with the university in, I believe, 1998. This
college, Penn State, has known that something was up for almost 13 years.
And now that it`s blown out into the open like this, they`re offering up
this man in his 80s, thinking this is going to somehow clear us of our
failure to do our job, or to do what`s just kind of decent and morally
right.

And, you know, win just think this is a -- I mean -- just going back
to the Catholic church for a second on this same issue, no bishop sits in a
jail cell. The cover-up -- the priest who committed a lot of those crimes
were sick and needed help. The bishops weren`t sick, and they covered it
up, they ignored the complaints, they knew it was going on, but the
institution came before the human being.

O`DONNELL: And that`s what we`re seeing here.

MOORE: That`s exactly what we`re seeing.

O`DONNELL: Institutional protection. And again, the Catholic Church,
big stakes, big money, in many ways, involved, both on the sensation of
possibility liability and all that sort of thing.

And so, the behavior, there`s become a sort of American denial of
responsibility when you get to very large institutions. This is what we`re
talking about on "Occupy Wall Street," what we`re talking about in that
industry, is there`s no personal responsibility.

Plenty of people who knew we shouldn`t be doing this, we shouldn`t be
doing that, but no one taking the action, the responsible action that stops
the big institution with the big money stakes from continuing.

MOORE: Right.

Well, it`s -- greed operates on many levels. And it`s blinding to
those who are participants in it. And I don`t know what part of that first
incident where the person who worked for the athletic program said that he
walked in on, visually saw, in person, not a rumor, not innuendo, the
assistant coach raping a 10-year-old in the shower.

What part of that needs to be -- you know, when you go and you tell
the coach that, and he tells the school, which he should have done, but
then continued to work with the coach? I just -- it just -- I feel sorry
for these kids and the parents and, I feel sorry for the students at Penn
State who love going there and had no idea that this was going on.

O`DONNELL: Yes. And who were, obviously, hugely invested in an
image, in a sense of actually the opposite. This was supposed to be the
football program filled with honesty and integrity and not corrupted by the
big money system, and by all those big stakes and those big pressures that
are out there in that system.

It`s -- it is just something that, it`s shocking, and yet there`s a
weird aura of, we`re kind of familiar with this in this country. We`re
kind of familiar with the big institution looks the other way if the stakes
are high enough.

MOORE: That`s right. And --

O`DONNELL: I mean, we even had Rick Santorum, the former senator from
Pennsylvania this week, not quite knowing what to say about this. Now,
this is somebody who has very, very strong opinions about what the
government should do in relation to the way people conduct themselves
sexually.

MOORE: Yes.

O`DONNELL: And on this, he just wasn`t so sure exactly what to make
of it, when he first heard about it. I mean, such are the political
pressures of such a thing in Pennsylvania.

MOORE: Well, and plus, you know, these politicians like Santorum and
the people we saw in the debate tonight, I don`t know what planet they`re
on. I don`t know what world they live in.

But this issue of sexual abuse, of rape, whether it`s of children or
whether it`s of -- I forgot what the statistic was of how many, you know,
women are raped every few minutes -- there`s at least one woman raped every
few minutes in this country. It`s a huge, huge problem. It really doesn`t
get discussed very much.

And you saw tonight in the debate when Maria Bartiromo attempted to
ask Cain the question, she got booed, and then after his answer, you had
one of the loudest applauses of the night. The applause said very clearly,
shut up, woman, don`t ask questions like that. And, obviously, we still
have a long way to go.

O`DONNELL: We still have Steve Schmidt with us.

Steve, your reaction to this development with the ousting of Coach Joe
Paterno?

SCHMIDT: Well, it`s a devastating story, particularly for the
children. But I think it`s a story of moral cowardice. Beginning with the
28-year-old graduate assistant who, I understand, remains an assistant
coach, who witnessed this, didn`t call the police. He called his dad. And
he talked to Coach Paterno about it.

It`s a cover-up. I agree with Michael Moore that this probably goes
much deeper than the people who have been fired tonight and fired,
deservedly so.

One of the great issues of our time is the collapse of trust in nearly
every major institution in the country saved the United States military.
And it`s another example of an institutional failure breaking the trust
with the people.

And it is a sad day for Penn State, but it is a tragedy for those
children who were abused. And it`s a particular tragedy for the children
whose abuse after occurred after the first incident. And Joe Paterno, a
person who so many of us admired in this country, goes out tonight in
disgrace because his actions were disgraceful. And no one should have
sympathy for him because of that.

O`DONNELL: Steve, you`ve seen this kind of crisis management before,
not exactly this model, obviously, but how do you -- how would you advise
the university to handle this from this point forward, obviously conceding
they`ve made a lot of mistakes up to now?

SCHMIDT: I think that they need to bring in independent
investigators, people of unimpeachable integrity who will top to bottom
review what happened. What were the systems failures that took place here?
Why did this happen? Why was it covered up? Who was involved?

And they need to issue a report that is completely transparent and
completely honest. And whether, you know, it is a former governor of
impeccable credentials like tom ridge, you know, some Democratic
counterparts, but people of impeccable integrity need to come forward, I
think, be called forward, to evaluate this and to report on it with total
transparency and get all the facts out there, after a thorough
investigation.

O`DONNELL: Steve Schmidt, thank you again for joining me. We`ll be
back with more, with Michael Moore. We`ll get to talking about the debate.
And later my interview with Jack Abramoff.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

MITT ROMNEY, (R) PRESIDENTIAL CANDIDATE: What happens with profit is
that you can grow the business. You can expand it. You add working
capital and you hire people. The right thing for America is to have
profitable enterprises that can hire people. I want to make American
businesses successful and thrive. What we have in Washington today is a
president and an administration that doesn`t like business, that somehow
thinks they like jobs, but they don`t like businesses.

(END VIDEO CLIP)

O`DONNELL: Michael, the Republican candidates went into your home
state of Michigan, tonight, to debate. Not one of them, not one of them
supported the auto bailout that president Obama did that effectively saved
the American automobile industry.

MICHAEL MOORE, ACADEMY-AWARD WINNING FILMMAKER: Not only that, there
was no discussion of jobs, real jobs, in a state where there are hundreds
of thousands of people who have lost their jobs. We`ve had the highest
rate unemployment for the last five years. And also no apology on their
part as a party for giving this disastrous economy to the new president,
having destroyed it in the previous president`s term. Nobody seems to want
to take any credit for that.

But I was just wondering, the people in the audience there, what they
were feeling and thinking when there was actually no discussion about real
jobs or how to put people back to work.

But it was one of those debates where -- I`ve enjoyed watching all
these Republican Party debates, and it just, you know, tonight we learned
from Michele Bachmann that $10 for people who didn`t know what $10 was,
it`s two happy meals.

(LAUGHTER)

MOORE: Huntsman, who was really like the only sane person there, you
know. It`s like he`s -- the it`s like he`s taken --

O`DONNELL: Defiantly sane, Jon Huntsman.

MOORE: It`s like he`s taken the other seven out on a field trip, like
they don`t know they`re at a debate. Like he`s the doctor and he`s brought
them along. I don`t understand. But he said something -- and Perry, over
what he did there, where he was trying to remember the third department
that he would get rid of. I thought the next question to him actually was
going to be, name the three meals you`ve had today.

(LAUGHTER)

MOORE: And he`s going, breakfast, lunch -- and they were trying to
help him out. They were shouting out departments. EPA! Close the EPA!
Close this, close that.

And to John Harwood`s credit --

O`DONNELL: Oh, fantastic. I loved that he stayed with it.

MOORE: He stayed with it. He didn`t allow it to be laughed off. I
thought, boy, that was a great moment.

But Huntsman`s ending moment, because I think he`s, again, the sanest
of the bunch, he said that he wants medical records computerized and
streamlined so that patients will receive a more efficacious form of
treatment. I think using the word "efficacious" at a Republican debate,
you`re over. You`re just over. That`s the end of you, sadly.

O`DONNELL: Yes. And it is over. They talked a little bit about the
foreclosure crisis, the housing crisis in this country. The Republican
plan is, of course, both from Ron Paul and Mitt Romney, each end of that
very narrow conservative spectrum that`s out there. Each end says, oh, you
know, tough. You know, don`t do a thing. Let the market completely bottom
out. Let everybody lose their homes who has to lose their homes. There
should be no intervention whatsoever. There shouldn`t be any adjustments
on those mortgages. Just let them go. Really Marie Antoinette attitude
toward it.

MOORE: And it`s also a call to destroy the United States of America.
Just think if they had been president instead of Franklin Roosevelt during
the Great Depression. Do nothing!

O`DONNELL: We`d still be in it.

MOORE: Not only would we still be in it, but would we have handled
World War II?

O`DONNELL: Well, surrender would be one option, just not entering it
at all, I guess, would be the other. Let Canada go do it, I guess, right?

MOORE: Yes. I think the American people get this. They`re living
it. Obama, I don`t think he has much to worry about.

O`DONNELL: I think he`s winning every one of these debates. These
guys keep staking out these right-wing positions repeatedly. They
basically keep loading up the Obama campaign with video of Romney, who`s
going to be the nominee, staking out these wildly right-wing positions.

MOORE: Right. Yes. No. Can I say one positive thing about Newt
Gingrich, just --

O`DONNELL: Take your time. This is history you`re making here.
Michael Moore, something positive about Newt Gingrich.

MOORE: Well, we just heard Steve Schmidt --

O`DONNELL: He said I agree with Michael Moore, we made history there.

MOORE: Somebody from the Cain campaign said I agree with Michael
Moore. So I just want to return the props there. When he -- when they
were all asked to tell us what your health care plan is in 30 seconds, and
he sort of rightfully said, no, you can`t do that in 30 seconds and I
won`t. But then Maria kept pushing him and he gave in. And I was just,
no, don`t do it. Stick to your guns here. This is your right. This is
more complicated than that.

But he eventually gave in and did it. But I was at least momentarily
impressed with him saying something that should be obvious to most people.

O`DONNELL: Filmmaker, activist, friend of the show, Michael Moore,
thank you very much for joining me tonight.

MOORE: Thank you very much.

O`DONNELL: My interview with Jack Abramoff is coming up next.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

KEVIN SPACEY, ACTOR: You say I`m selfish. (EXPLETIVE) you! I give
back plenty. You say I have a big ego. (EXPLETIVE) you twice! I`m humbly
grateful for the wonderful gifts that I`ve received here in America, the
greatest country on this planet! I`m Jack Abramoff. And oh, yes, I work
out every day.

(END VIDEO CLIP)

O`DONNELL: That was Kevin Spacey in "Casino Jack," based on the true
story of the most corrupt lobbyist of our time. In the spotlight tonight,
Jack Abramoff. On January 3rd, 2006, jack Abramoff pleaded guilty to
federal charges of conspiracy, corrupting public officials, tax evasion,
and mail fraud. He received a reduced sentence in exchange for cooperating
with federal investigators, which ultimately led to the conviction of one
lawmaker, former Ohio Republican congressman Bob Nay.

Joining me now is Jack Abramoff, author of the new book, "Capitol
Punishment -- The Hard Truth about Washington Corruption from America`s
Most Notorious Lobbyist." Jack, thanks for joining me tonight.

JACK ABRAMOFF, AUTHOR "CAPITOL PUNISHMENT": Thank you very much.

O`DONNELL: So you name yourself our most notorious lobbyist.

(LAUGHTER)

O`DONNELL: What other adjectives were on your list to self-describe?

ABRAMOFF: Well, my list, probably none that -- other than notorious.
Other people had other adjectives, but I couldn`t put them on the book.

O`DONNELL: Now, you know, the book reads to me not as a story of a
corrupt Congress, but as a story of a corrupt Republican Congress. There
are Democrats in this book?

ABRAMOFF: There are. There`s Harry Reid in the book.

O`DONNELL: For what?

ABRAMOFF: For helping our lobbying efforts, accepting money from us.
I think the important -- the important thing, I think, is that Republicans
and Democrats are part of the same system. The system, overall, needs to
be changed. And Republicans and Democrats, unfortunately, have
participated over the years, over the decades in the same system, as did I.

O`DONNELL: But you now famously told Leslie Stahl the other night on
"60 Minutes" that you owned 100 members of Congress. They were all
Republicans, right?

ABRAMOFF: No.

O`DONNELL: Which Democrats did you own?

ABRAMOFF: Well, the phraseology of "own" I think became part of "60
Minutes" show. But I guess probably the better way to phrase it is
"heavily influence." There were scores of Republicans and Democrats.
Lawrence, I can`t stress enough that the system itself is indictable. The
system itself is the problem.

I don`t want to sit here and blame individual congressmen or senators
that are part of the system, even individual lobbyists. I think that
they`re human beings. And human beings operate a certain way, have certain
incentives and motivations, and they need to have a system that doesn`t
play to and lure them into a system of difficulties. And I think that`s
what we have today.

O`DONNELL: The -- there are a bunch of e-mails that are -- some of
them are not included in this book, that you were questioned about at
different times, including in a Senate hearing where a senator Ben
Nighthorse Campbell was questioning you. He said he referred to one of
your e-mails, and it`s about your representation of Indian tribes, and he
said, "You sent an e-mail to Mr. Scanlon, which referred to some of your
clients. Let me read it to you. I`ll eliminate the profanities to avoid
those, but you can fill in the blanks. "Are you f-ing kidding me? I hate
those f-boy scouts. What a bunch of a-holes." We can fill in the blanks.
But to which Indians were you referring? Why did you refer to them in such
despicable terms?" You took the Fifth Amendment. Can you answer that
question now?

ABRAMOFF: Well, I sent over the course of my career some very stupid
e-mails. That was one of them, obviously. I was a very passionate and
emotional player in what I was doing. And sometimes our emotions spilled
over into jocular, and frankly, stupid e-mails. That`s one I regret. I`ve
apologized for it. I apologize tonight for it. It was just a stupid move.

O`DONNELL: One of your rackets was Indian tribes, basically,
representing Indian tribes and playing the casino game on one side or the
other, trying to help some of them get permission to run casinos, trying to
prevent other tribes getting permission to run casinos, because that would
compete with your tribe, casino.

And in one of those non-compete games, you ended up in a situation
with Ralph Reed, and they asked you under oath in the Senate committee,
Kent Conrad asked you, he said, "I would like to ask, did you, Mr.
Abramoff, you and your partner, your colleague, Mr. Scanlon, give $4
million to Ralph Reed?" And you pled the Fifth Amendment on that and didn`t
answer that. Did you give $4 million to Ralph Reed?

ABRAMOFF: Yes, we provided -- Ralph Reed was a very important vendor
in terms of our effort to slow down competition for our tribes, absolutely.
I don`t know the exact number.

O`DONNELL: And you -- and that $4 million was delivered to Ralph reed
to get him to mobilize Christian conservative opposition to a casino that
some Indian tribe you weren`t representing was trying to --

ABRAMOFF: Well, either Indian or non-Indian casinos.

O`DONNELL: Any casino --

ABRAMOFF: We hired our clients, as often others are, to prevent them
from losing their market. And we were very creative and used every method
we could to do that. And one of them was to mobilize people who hated
casino gambling for the short-term strange bedfellows partnership of
working together to stop a new casino.

O`DONNELL: One of the tribes, the Tiguas that you represented,
eventually they ran out of money in their ability to pay you. How much did
they pay you over time if you can recall?

ABRAMOFF: I think it was a couple million dollars.

O`DONNELL: And eventually they ran out.

ABRAMOFF: Right.

O`DONNELL: And so you came up with another idea. "In 2003, Abramoff
approached the Tigua tribal council with a novel proposition, free term-
life insurance for all elder members of the tribe. Abramoff would pay the
premiums. But there was a catch. The death benefits from the term-life
policies that Abramoff paid for would not be paid to the families of the
tribal elders, but to a private school in Washington, D.C. The school,
founded and directed by Abramoff, would then use the money to pay Tigua
lobbying fees to Abramoff`s firm."

So a private school you created in Washington D.C., you were going to
use that to launder money to then pay you lobbying fees?

SCHULTZ: You know, Lawrence, I think with all of this stuff, I was
involved in an area I shouldn`t have been involved in. That was an
example. That particular thing was an insurance program that the law firm
that I was a member of created in their insurance division to help
nonprofits. It was put forward not only to the Tigua tribe, not by me, but
to the firm by other corporations and native American organizations.
Unfortunately it was, yet again, something I shouldn`t have been involved
in and which I`m terribly sorry that we were.

O`DONNELL: Now, you were opposed -- these people that you called in
some of these e-mails "morons" and one other lobbyist who represented other
Indian tribes, you called him a moron, and these other terrible terms you
were using, these were the people who actually brought you down.

ABRAMOFF: I brought myself down, Lawrence.

O`DONNELL: But they started the investigation.

ABRAMOFF: Maybe. I`m not certain. I`m not certain. Does it matter,
really?

O`DONNELL: It matters. Well --

ABRAMOFF: I was doing things that were wrong. I was doing things I
shouldn`t have been doing. I was in a business I shouldn`t have been in.
I`ve been severely punished for it. I`ve been totally bankrupted from it.
And now I`m trying to make recompense and trying to get involved to try and
help clean up the system. These are things that I`ve gone through, you
know, before.

O`DONNELL: Well, you know who he is Tom Rogers. He was a lobbyist
who represented other Indian tribes. He, himself, is descended from Native
American. His mother is Native American. You called him a moron. He was
one of the people who started the investigation against you. Have you
apologized to him?

ABRAMOFF: No, I don`t have any contact with Tom Rogers.

SCHULTZ: Have you apologized to any --

ABRAMOFF: Absolutely. I have many Native American supporters, by the
way, who came to my hearings and who understood, by the way, that this
small aberrant behavior should not take away from the fact that I did
wonderful things for these tribes that I represented and Indians country in
general.

I was the one who was responsible as a lobbyist for stopping the
Republican UBIT, unrelated business income tax, in 1995 that would have
decimated Indian gaming opportunities. We helped them on health care. We
helped them on education, on crime, issues across the board.

Our team spilt blood for our tribes, we loved our tribes. I sent
850,000 e-mails over the course of time I was a lobbyist. That`s a lot of
e-mails. There were probably 50 e-mails that were jocular, stupid, dumb,
an emotional, and ridiculous. They didn`t represent what I felt. And
unfortunately I guess I`m not the first person to write dumb things in e-
mails, but I`m the poster child of the guy, when they say don`t write
something in an e-mail you don`t want to see on the front page of "The
Washington Post," that`s my picture that comes up.

O`DONNELL: And the Congress has not forgotten about you. I want you
to listen to what Representative Frank Wolf said referring to you just
recently.

ABRAMOFF: OK.

(BEGIN VIDEO CLIP)

FRANK WOLF: My conscious has compelled me to come to the floor today
to voice concerns I have with the influence Grover Norquist, the president
of Americans for Tax Reform, has on the political process in Washington.
One of Mr. Norquist`s relationship with Jack Abramoff. Mr. Abramoff
essentially laundered money through ATR and Mr. Norquist knew it. I
believe Mr. Norquist is connected with or has profited from a number of
unsavory people and groups out of the mainstream.

(END VIDEO CLIP)

O`DONNELL: Is he right?

ABRAMOFF: I think Frank Wolf has an agenda. Obviously, he`s upset
with Grover over whatever, I don`t know. I`m not really close to Grover at
this point.

O`DONNELL: The anti-tax pledge and locking them in on the tax --

ABRAMOFF: Fine. Fine. I`m not involved in that, obviously. The
accusation --

O`DONNELL: But did you launder money through --

ABRAMOFF: The accusation that Grover Norquist or his organization
broke the law laundering money or anything I think just has to meet with
the fact that this cause investigated with 300 investigators in the Justice
Department and the FBI, with 2,000 open investigations, and Grover Norquist
wasn`t indicted, didn`t have to plea, was never really brought in any way
close to, as I understand it, a problem.

However, people like Frank Wolf and others perhaps want to keep
pounding him for having an association with me. I can`t really say much
about that.

O`DONNELL: The book is "Capitol Punishment." Jack Abramoff, thanks
very much for joining us. I wish I had more time to get into how you
actually ended up doing these things. I wanted to get into the details so
people can understand what it was, but I really wish we could get into how
it all happened.

After this break we`re going to have reaction from fired Penn State
football coach Joe Paterno.

(COMMERCIAL BREAK)

O`DONNELL: Speaking at his house just a few minutes ago, Joe Paterno
told students, "Right now I`m not a football coach and that`s something I
have to get used to."

The Penn State board of trustees fired Paterno and Penn state
president Graham Spanier tonight over an alleged cover-up of sexual abuse
of as many as eight boys by assistant coach Jerry Sandusky, some of which
allegedly happened on school property. Critics say Paterno himself should
have done more after learning about the allegations back in 2002. Much
more of this story is ahead on a live edition of "THE ED SHOW."

A quick programming note. Tomorrow night, my pick for the Republican
presidential nomination, Tim Pawlenty, will be here on THE LAST WORD.

(BEGIN VIDEO CLIP)

O`DONNELL: Tim Pawlenty, the candidate with the best shot at the
Republican nomination, will officially announce what we have known for
about a year -- he is running for president. The view that has been the
official position of this show since last year, that Tim Pawlenty is in the
strongest position to win the Republican presidential nomination.

The official position of this show is that Tim Pawlenty is going to be
the nominee.

Here`s the Pawlenty wins theory -- Pawlenty wins everything on this
show, by the way. It`s the theory of the show. This show has officially
declared Tim Pawlenty to be the nominee.

Tim Pawlenty, who on this program and nowhere else is considered the
front-runner for the Republican nomination.

(END VIDEO CLIP)

O`DONNELL: We`ll talk about how the Republican landscape would be
different today if Pawlenty had just stayed in there. Joining me tomorrow
night, Tim Pawlenty. You can have THE LAST WORD every night online at our
blog, TheLastWord.MSNBC.com. You can follow my tweets @Lawrence. "THE ED
SHOW" live is-up next.

END

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