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'The Last Word with Lawrence O'Donnell' for Thursday, August 2nd, 2012

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THE LAST WORD WITH LAWRENCE O`DONNELL
August 2, 2012

Guests: Kal Penn, Sam Stein, Jeremy Timken, Nia-Malika Henderson; Sam
Stein; Mark Thompson; John Heilemann

LAWRENCE O`DONNELL, HOST: Fair warning: I`m going to use the F-word
tonight. Is the big secret in Mitt Romney`s tax returns a felony?

(BEGIN VIDEOTAPE)

RICHARD NIXON, FORMER U.S. PRESIDENT: I would like to talk to you for
a moment about dollars and cents.

GEORGE W. BUSH, FORMER U.S. PRESIDENT: Some people call you the
elite. I call you my base.

REP. CHRIS VAN HOLLEN (D), MARYLAND: We had big tax cuts in 2001,
2003.

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: Now I want to lay out for
you specifically what I`m going to do. It`s five things. All right? Five
things.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Mr. Romney is asking
you to pay more so that people like him get tax cuts.

ROMNEY: I`m not going to raise taxes on the American people.

VAN HOLLEN: He`s shifting the burden on to middle class taxpayers.

OBAMA: Hold on. It gets worse.

ROMNEY: You get a little red arrow. I`ve got a green arrow.

O`DONNELL: Millionaires, however, would receive an $87,000 tax cut.
How`s that for early morning prompter reading.

ROMNEY: Oh, my goodness.

NIXON: Is that what you want for Americans?

ROMNEY: Sorry, guys. I`ve got nothing for you.

UNIDENTIFIED MALE: He is a Wall Street rich guy who will not show his
tax return returns.

AL SHARPTON, MSNBC HOST: Mitt Romney tries desperately to say he`s an
every man.

REP. DEBBIE WASSERMAN SCHULTZ (D-FL), DNC CHAIR: If you`re running
for the president of the United States, you should release your tax
returns.

CHRIS MATTHEWS, MSNBC HOST: Romney is hanging fire on this thing.

ROMNEY: Sorry, guys. I have nothing for you.

ERIC FEHRNSTROM, OBAMA CAMPAIGN: Mitt Romney has gone above and
beyond what the law requires.

SHARPTON: Folks, I would be laughing if it wasn`t so scary. Maybe
the joke is really on us.

SAM STEIN, HUFFINGTON POST: Romney should pick a Chick-fil-A sandwich
as a running mate, it`s becoming so popular in the Republican Party.

ROMNEY: Sorry, guys. I have nothing for you.

UNIDENTIFIED MALE: Chick-fil-A looks a lot better to me at this hour
than Rob Portman does.

(END VIDEOTAPE)

O`DONNELL: Mitt Romney who is as far as we know, the only
presidential candidate in history to have foreign bank accounts is now
feigning outrage that we are speculating about why he continues to be the
only modern presidential candidate who has decided to keep his tax returns
secret. But he is not just keeping his tax returns secret, he is lying
about them. He promised ABC News on Sunday he would check his tax returns
and give an answer as to whether he ever paid less than 13.9 percent in
income taxes.

He has now refused to give ABC News the answer he promised them,
thereby making his initial response to ABC News nothing short of a Romney
lie.

As Romney`s politically damaging lying and secrecy about his tax
returns continues, our reason to question those tax returns only increases.
And tonight`s question is: is Mitt Romney hiding a felony in his secret tax
returns?

A former federal prosecutor will join me to address that question.

But first, with 96 days until the presidential election, a new poll
shows Mitt Romney heading into the election with the worst favorability
rating of any modern presidential candidate. And today, President Obama
hammered Mitt Romney for proposing a tax plan that cuts income taxes only
for the Romney-like wealthiest Americans.

(BEGIN VIDEO CLIP)

OBAMA: We do not need more tax cuts for folks who have done very,
very well. We need more tax cuts for working Americans. We need tax cuts
for companies that are investing here in Florida and here in the United
States of America, hiring American workers, sending products around the
world, stamped with those proud words "Made in America."

That`s what we`re fighting for. That`s the choice in this election.
And that`s why I`m running again for president of the United States of
America.

(END VIDEO CLIP)

O`DONNELL: Ahead of the president`s remarks today, his campaign
released this ad that will air in eight battleground states.

(BEGIN VIDEO CLIP)

NARRATOR: You work hard, stretch every penny, but chances are you pay
a higher tax rate than him. Mitt Romney made $20 million in 2010 but paid
only 14 percent in taxes -- probably less than you. Now he has a plan that
would give millionaires another tax break and raises taxes on middle class
families by up to $2,000 a year.

Mitt Romney`s middle class tax increase. He pays less, you pay more.

(END VIDEO CLIP)

O`DONNELL: A new poll shows President Obama leading Mitt Romney
nationally by a wide margin. Among registered, the president leads Mitt
Romney by 10 points, 51 percent to 41 percent. Among registered voters in
a dozen battleground states, President Obama leads Mitt Romney by four
points, 48 to 44 percent.

On favorability nationally, the president leads Mitt Romney by a
spread of 20 points, 50 percent view President Obama favorably, 45 percent
view him unfavorably; 37 percent view Mitt Romney favorably, 52 percent
view him unfavorably. The only presidential candidates to be viewed
negatively heading into the election in this poll were George H.W. Bush in
October 1992 and Bob Dole in October 1996. And, of course, both Bush and
Dole lost those elections.

Joining me now, Kal Penn, national campaign co-chair for Obama for
America and star of "Harold and Kumar" movies and television shows "House"
and "How I Met Your Mother." And MSNBC contributor Joy Reid, star of THE
LAST WORD.

(LAUGHTER)

O`DONNELL: The rule of this show is the person with the fewest
credits gets to go first. So on these polling --

JOY REID, MSNBC CONTRIBUTOR: I`m working on it.

O`DONNELL: -- on the favorability number, if that holds, that`s all
you need to know.

REID: That`s all you need to know. Until you said the word felony, I
was going to say, the only thing worse than being an unpopular candidate
going into election where all the negatives about you are reinforced by
almost everything you do, right? You`re a 1 percenter who wants to cut the
1 percent`s taxes.

The only thing worse than that, except the felony piece, is vowing to
raise 95 percent of voters` taxes. This is the death knell for any
candidate, right? Going into the election, Democrats are terrified to look
like tax raisers.

Now, you have a Republican, you have an independent body saying he`s
going to raise your taxes, middle class. I don`t see how it can get any
worse, except the felony.

O`DONNELL: Kal, ever since Mondale`s campaign, Democrats have been
afraid to mention taxes while running for president. Bill Clinton
mentioned them but by only saying he would have a middle class s tax cut,
which he then didn`t do.

Here you have President Obama saying plainly, I would like to see tax
rates go up on taxpayers above this level, up there at the Romney level,
and the Romney campaign doesn`t seem to be able to find the answer to that.

KAL PENN, OBAMA FOR AMERICA: I think because the president has been
very transparent about it, right? I think it was even this week that on
BarackObama.com, there`s a tax calculator where you can punch in the
numbers and see exactly which plan stands where.

But we also don`t have such a short-term memory anymore. We know
eight years of failed bush tax policies equals the same as what Governor
Romney is proposing and that got us into the mess to begin with. So, I
think a lot of folks who have been struggling the last few years and who
are benefiting from a recovery remember we don`t want to go back in that
terrible direction.

O`DONNELL: Talk to me, Kal, about voter turnout this time around for
the president. You were one of the enthusiastic Obama supporters four
years ago, so enthusiastic you gave up your career, went to work in the
White House. Now you`re back working in your previous career.

And yet, you seem to have all the enthusiasm you had four years ago.
It doesn`t seem the Obama team is ready to count on everyone out there
having the same amount of enthusiasm four years ago.

PENN: That`s always been the case, right? I mean, the reason I`m so
enthusiastic frankly, what got me involved in 20 2007 was having friends
serving overseas in Iraq. Buddies who couldn`t serve openly because of
"don`t ask, don`t tell", friends that couldn`t afford to go to college.

Now, we`re out of Iraq, bin Laden has been taken care of, my buddies
can afford to go to college. Jobs are coming back to the United States.

That`s sort of the sustain enthusiasm that things went from idea to
execution. But you`re right. The campaign`s, I think, greatest strong
point is wanting to make sure everyone who wants to be included is
included.

So, I`m going to seven states this week. The campaign is in all 50
states. We had a huge voter registration last weekend, doing celebrations
for the president`s birthday this weekend.

The strategy there is to make sure everyone is fairly registered to
vote, that everyone knows their rights to vote -- you know, the idea if you
bring five of your friends to the polls before that, make sure they know
what the issues are, know what they care about, how are they benefiting,
who are the 2.5 million -- I`m sorry, 3.1 million young people that now
qualify for health care that didn`t have it before. What are the stakes?

And sort of the political banter I know goes back and forth. It`s
nice the president is up four points now. I think, by the way, that`s
definitely tied into the fact that voters aren`t buying the rhetoric that
somehow Romney is the guy to benefit the middle class.

But those are things that are all, you know, that we`re all sort of
the pushing to make sure that everyone feels included and understands
exactly how the president has benefited them.

O`DONNELL: But, Joy, all of the efforts that Kal is talking about are
going to bang up against this voter suppression campaign that`s going on
out there in those states that we`ve been covering on the show. It seems
like the Obama campaign is going to have to have a technique for dealing
with that.

REID: Yes. There`s going to be a lot of lawyer out there on Election
Day, because that is the "x" factor here, right? You know, Mitt Romney`s
job is to take away constituents who voted for the incumbent. It`s very
difficult to defeat a presidential incumbent. It`s only happened three
times since World War II.

But if the Republicans can take enough voters off the playing field,
that puts states like Pennsylvania in play. It puts states like Wisconsin,
two of the states with the toughest voter ID laws.

Then you have machinations like Florida where they`re cutting the
early vote period, which is heavily used by African-Americans. They`re
going right at African-Americans, right at Hispanics and right at young
voters, which is what Kal is working on.

So, the Obama administration is going to have to play sort of three-
dimensional chair. They`re got to do a proactive effort to get people out.
They have to also protect the vote when people get to the polls.

O`DONNELL: Go ahead.

PENN: There was a web site that was set up recently called
GotToVote.org. It`s extremely comprehensive. It`s state-based. So,
wherever you live, you can type in your zip code, figure out exactly what
you have to do to make sure your friends are registered and that your
friends know exactly what they need to do as well.

O`DONNELL: Kal, I think the most effective ad I`ve seen from the
Romney side, given that they have to get Obama voters to switch -- that`s
just the math from the last election to this election -- is the one that
says we understand why you voted for him. They have an ad that says we get
it. We understand why you went for his hope message and he had a shot, he
tried, he failed. It`s time for change.

It`s one of those ads that says, the guy just failed at this
particular job. But we understand why you cast that vote four years ago.
What`s your answer to that approach?

PENN: Look, I think that`s silly. That`s the silliness of political
sport.

I think it`s a very tough argument for them to make when you have
folks like Mr. McConnell vowing his number one priority was not jobs. It
was not to take care of the troops. It was not to make sure manufacturing
was coming back to the United States. It was to make sure the president
somehow failed.

So, OK. So, then you`ve got your candidate saying the president
failed. That`s no surprise. The president obviously hasn`t failed. He`s
done a tremendous amount of progress and we want to make sure we`ve got
four more years of continuing that progress so we can get to where we all
want to be.

O`DONNELL: Joy, the polling turnaround here is going to have to
happen at a point in the calendar where it can hold. If Romney is going to
turn this around, when does the clock start to run out?

REID: Well, I mean, the problem for Mitt Romney is that it appears
that Americans have already factored in their negative attitudes towards
the economy. So, he can`t -- I think they`re counting on jobs reports.
That every time there`s a negatives job report, there will be one right
before the Election, that will be his opportunity.

O`DONNELL: Right.

REID: But that hasn`t worked. People already have a sour attitude
towards the economy. And they still prefer Barack Obama to Mitt Romney.
It`s still a choice, not just a referendum.

So I think probably what they`re counting on is the convention. When
he can sort of present his case, when the entire country is sort of
watching. That somehow Romney can make this grand case.

The problem is, he doesn`t have the personality for that. I have yet
to see the Mitt Romney who can get on a podium and move enough people, you
know, saying it`s OK. I don`t think that`s going to be enough.

O`DONNELL: Kal Penn and Joy Reid, thank you very much.

PENN: Thank you.

REID: Thank you.

O`DONNELL: Coming up, Harry Reid believes Mitt Romney is hiding
something big in his secret tax returns. I suspect he might be hiding
something even bigger, a felony.

And in the "Rewrite" tonight, a Republican congressman says congress
is an alcoholic on its way to hitting rock bottom. And Grover Norquist is
its bartender.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Hitting bottom is in a weekend retreat.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

O`DONNELL: What could possibly be in those tax returns that makes
Mitt Romney so reluctant to release them? Coming up: the worst case
scenario -- a felony.

And later, Chick-fil-A claims record sales on its appreciation day and
Bill O`Reilly claims you should never pressure other people to boycott
something unless, of course, you`re Bill O`Reilly who has called for more
boycotts over the years than he can remember. That`s coming up.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Little did I dream you could be so reckless and so
cruel. Let us not assassinate this lad further. Have you no sense of
decency, sir?

FEHRNSTROM: Harry Reid`s charges are baseless and they`re untrue.
And I would ask him one simple question -- have you no sense of decency,
sir?

(END VIDEO CLIP)

O`DONNELL: The McCarthy moment has arrived in the presidential
campaign. That was Mitt Romney`s etch-a-sketch guy in effect accusing
Harry Reid of being the moral equivalent of the lying alcoholic Republican
senator of the 1950s, Joe McCarthy, who tried to ruin lives on a communist
witch hunt which included precious little actual evidence of subversion.

This is why Romney world thinks Harry Reid is the new Joe McCarthy.

(BEGIN VIDEO CLIP)

SEN. HARRY REID (D-NV), MAJORITY: The word is out he hasn`t paid any
taxes for ten years. Is let him prove that he has paid taxes because he
hasn`t. We already know from one partial tax return that he gave us, he
has money hidden in Bermuda, the Cayman Islands and the Swiss bank account.
Not making that up, that`s in the partial year he gave us.

(END VIDEO CLIP)

O`DONNELL: That`s not the first time Harry Reid has said something
about Mitt Romney`s secret tax returns.

But despite Harry Reid repeating that, the idea that Mitt Romney went
10 years without paying any taxes has not become a major story until Sean
Hannity unwittingly did the Obama campaign this huge favor.

(BEGIN AUDIO CLIP)

SEAN HANNITY, FOX NEWS HOST: Do you have any response to Harry Reid
or even paid attention to what he`s saying about you the last couple of
days and -- that you haven`t paid taxes in 10 years?

ROMNEY: Well, it`s time for Harry to put up or shut up.

(END AUDIO CLIP)

O`DONNELL: Have you noticed something about Mitt Romney`s laugh?
Have you noticed when he does it?

Well, let`s put it this way. You ask him a question that scares him
about his secret tax returns and he laughs.

(BEGIN VIDEO CLIP)

JENNIFER HOTCHKISS-KAPLAN, WNEC STUDENT: You have refused to release
your income tax forms. Do you have something to hide?

ROMNEY: I believe very deeply in my personal privacy, what little
about is left. I`m not going to release my income tax returns.

JOHN KING, CNN: Back in 1967, your father set a ground breaking, what
was then a ground breaking standard in American politics. When you release
your? Will you follow your father`s example?

ROMNEY: Maybe. I don`t know how many years I`ll release. I`ll look
at what the documents are.

DAVID MUIR, ABC NEWS: Was there ever any year when you played lower
than the 13.9 percent?

ROMNEY: I haven`t calculated that. I`m happy to go back and look.

(END VIDEO CLIPS)

O`DONNELL: Let`s listen to the rest of Mitt Romney`s challenge to
Harry Reid.

(BEGIN AUDIO CLIP)

ROMNEY: Well, it`s time for Harry to put up or shut up. Harry`s
going to have to describe who it is he spoke with, because of course,
that`s totally and completely wrong. It`s untrue, dishonest, and
inaccurate. It`s wrong.

So I`m looking forward to having Harry reveal his sources and we`ll
probably find out it`s the White House.

(END AUDIO CLIP)

O`DONNELL: So we`re talking about Mitt Romney`s secret tax returns,
and Harry Reid is now the one that has to put up or shut up when Mitt
Romney could shut up Harry Reid. Mitt Romney could shut up all of us by
doing what every presidential candidate does and show his tax returns.

Every day that Mitt Romney refuses to show his tax returns costs him
politically and therefore logically casts more and more suspicion on why he
is not releasing his tax returns.

Tax expert Rush Limbaugh whose tax returns are object as big as
complex as Romney`s rushed to Romney`s defense, echoing what both Mitt and
Ann Romney have said about why they are not releasing the tax returns and
doing so in a way that makes it much more clearly an insult to the
intelligence of what Ann Romney would call "you people."

(BEGIN VIDEO CLIP)

RUSH LIMBAUGH, RADIO TALK SHOW HOST: Once they get 10 years of tax
records, they`ll be able to point to something in there that will make the
uninformed class think -- well, that`s outrageous. How in the world did he
write that off? He`s a tax cheat myrtle. How in the world can we vote for
a guy like that? Something like that is their objective.

It doesn`t have to be true. All it has to be is be complicated. All
it has to do is be unusual. All it has to have is something in there that
is not quite common.

(END VIDEO CLIP)

O`DONNELL: Harry Reid has just issued a statement in response to Mitt
Romney`s put up or shut up challenge. It is a long statement. I will read
it quickly in part.

Harry Reid says, "There is a controversy because the Republican
presidential nominee, Governor Mitt Romney, refuses to release his tax
returns. As I said before, I was told by an extremely credible source that
Romney has not paid taxes for 10 years.

People who make as much money as Mitt Romney have many tricks at their
disposal to avoid paying taxes. We already know that Romney has exploited
many of these loopholes, stashing his money in secret overseas accounts, in
places like Switzerland and the Cayman Islands.

Last weekend, Governor Romney promised that he would check his tax
returns and let the American people know whether he ever paid a rate lower
than 13.9 percent. One day later, his campaign raced to say he had no
intention of putting out any further information.

When it comes to answering legitimate questions the American people
have about whether he avoided paying his fair share in taxes or why he
opened a Swiss bank account, Romney has shut up.

But as a presidential candidate, it`s his obligation to put up and
release several years of tax returns, just like nominees of both parties
have done for decades. It`s clear Romney is hiding something and the
American people deserve to know what it is."

Joining me now are: Sam Stein, political expert for "Huffington Post"
and Jeremy Temkin, a tax attorney who specializes in tax cases. He`s a
former assistant U.S. attorney for the southern district of New York.

Jeremy, you`ve handled cases of people with foreign accounts. There
has recently been this amnesty program for people who did not fill out this
form that they`re supposed to fill out. If you have a foreign bank
account, you`re supposed to fill out this form saying how much was in it,
maximum value that year, if it`s over $10,000.

The government discovered the Cayman Islands, Switzerland,
institutions there were never reported. So people were getting away with
giant amounts of money that they were not turning in these forms on. The
government figured we`ll never get it unless we offer them an amnesty.

They`ve all been committing this felony of not reporting. If we offer
them an amnesty, we might get a bunch of them to report and finally get an
accounting of this money.

Is that where -- is that how the law has basically evolved here?

JEREMY TEMKIN, ATTORNEY: Yes, it`s a little more complicated
obviously. You committed a felony if you willfully don`t report the
account. It`s not just not reporting the account.

O`DONNELL: Provide an example of not willfully.

TEMKIN: Well, willfully is proven by if you lie to your accountant
and your accountant tells you if you have an offshore account and you said
no.

O`DONNELL: Yes, your defense would be I told my accountant, I don`t
know how he got this wrong.

TEMKIN: So, that would be the defense, the government has to prove --
in order to prove that it`s a felony, has to prove that you knew that you
had an obligation to report.

O`DONNELL: But certainly enough people thought they didn`t have the
defense available to them that they took a huge advantage of amnesty
program.

TEMKIN: The amnesty program has been a real boom both to people who
felt they didn`t have that defense available to them, but also to people
who thought that, you know, I may or may not have that defense available to
me, but let`s play it safe. Let`s get it --

(CROSSTALK)

O`DONNELL: If you say well, it was a year or 10 years or whatever,
and you file for the amnesty and you get the amnesty, you then have to redo
every one of those tax returns that was wrong, correct?

TEMKIN: Go back to 2003. So the voluntary disclosure program that
the IRS ran required taxpayers who didn`t comply with their requirements
such as disclosure requirements to go back to 2003, amend their returns
going back to 2003.

O`DONNELL: So that -- if a presidential candidate, unnamed
presidential candidate, who had giant amounts of money, hundreds of
millions of dollars in foreign bank accounts, for example, availed himself
of that amnesty, that would show up very clearly in every tax return going
back to 2003?

TEMKIN: Yes. And the older ones are the ones that would be most
problematic.

O`DONNELL: OK. Sam Stein, you covered presidential politics for a
while. How do you suppose it would play in presidential politics if a
presidential candidate had availed himself of a government amnesty covering
tax felonies of this kind?

TEMKIN: Well, first of all, let me say I`m glad you`re not asking me
the technical questions. It would have been met with a blank stare.

Secondly, obviously, it wouldn`t play well if it were to turn up. Not
only would it not play well, it could be used by the opposition campaign
badgering the candidate who had the problem. And I think, you know, again,
I`m a little -- I think everyone in the news business is a little
uncomfortable with the speculation that`s going on here because you`re
supposed to presume innocence. In some respect, you`re supposed to get the
facts out there.

But Mitt Romney has invited this to a certain degree by being so
opaque, by refusing to budge even a smidgen past this year and a half so
far of tax information that he`s almost begun to invite some of this stuff.
And, you know, it`s unfair in some respects, but it`s fair in others.

(CROSSTALK)

STEIN: I want to say running for president, you can`t expect this
type of privacy anymore. And I think he should have understood that.

O`DONNELL: Well, tell me one way, tell me one way in which it is
unfair to speculate about these secret tax returns of a presidential
candidate in a country where the custom has uniformly been for all
presidential candidates, especially the nominees, to release their tax
returns? What could conceivably be unfair about a range of speculation
about what`s in those tax returns, as long as the candidate refuses to
release them and then lies to the media, to the media that you say is
uncomfortable with speculation, that man lies directly to that media on
television about something he`s going to tell them and then he never tells
them?

STEIN: All right, so on the one hand it`s perfectly fair to call Mitt
Romney out for lying which he technically did to ABC News when he said he
would go back and provide an answer whether he paid the 13.9 percent rate.
He hasn`t done it. That was, you know, unfair to ABC News. That was the
Romney campaign`s fault.

The way it can be unfair, and I`m being very honest about this, if you
start speculating about reasons that he`s not releasing the tax returns.
And people start listening to the speculation and taking it as fact. And
it turns out to not be fact. They get an impression that it is.

O`DONNELL: Sam, tell me how it can turn out not to be fact. There`s
only one way, right?

STEIN: If he releases his tax returns.

O`DONNELL: That`s correct.

STEIN: So yes, now that`s where I`m getting at. All this can be
revolved with a little bit of transparency. And that`s where this ends up
being, which is that reporters have a commitment, of course, to
transparency. They should demand this type of information.

And I think it`s very telling that a tax return story that could have
been done in two days, maybe a week tops has now dragged on for several
weeks going on a month.

And I think the Mitt Romney campaign is actually funneling this. My
guess is that what`s in there is probably much more tame than what would
happen if he actually released it instantaneously.

O`DONNELL: Sam, quickly before we go. A media question. Should the
media be more uncomfortable with Romney`s secrecy about his tax returns or
with press speculation about what the tax returns might be hiding?

STEIN: It`s a great question. I wish I had an answer to that.
Obviously like I just said, the media should be very uncomfortable with the
fact that we`re not getting just tax returns, but bundler information for
Mitt Romney. I mean, the people who are fundraising his campaign in large
chunk, we don`t know their names. There`s a lot of secrecy out there.

Just like they should be uncomfortable with revelations that the Obama
White House was using private e-mails. These are things the media should
always care about.

With respect to what`s in the tax returns -- God, I mean, that`s
something they should care about, too. You know, it`s a very important
ethical debate. I wish I had concrete answers, but it`s something that we
struggle with at "The Huffington Post" all the time.

O`DONNELL: Appreciate the struggle, Sam.

(LAUGHTER)

O`DONNELL: Former federal prosecutor Jeremy Timpkin and Sam Stein of
the "Huffington Post." Thank you both, very much for joining me tonight.

Coming up, the only thing that might distract from taxes. Might for,
like, I don`t know, maybe five minutes. Mitt Romney`s vice presidential
choice John Heilemann and Nia-Malika Henderson are here. And Bill
O`Reilly, who loves, loves calling for boycotts against things all the
time, whole countries like France. Now doesn`t want people organizing a
boycott against Chick-Fil-A. That`s coming up.

(COMMERCIAL BREAK)

O`DONNELL: At the beginning of a hearing today in the House of
Representatives on a Republican bill to make English the official language
of the United States, the senior democrat on the committee, John Conyers of
Michigan chose to make his opening statement, not in English.

(BEGIN VIDEO CLIP)

REP. JOHN CONYERS (D), MICHIGAN: Gracias, Senor Presidente.

(SPEAKING SPANISH)

(END VIDEO CLIP)

O`DONNELL: And it`s intern night once again here on "the Last Word"
following our decades old tradition of putting interns on the show in their
last week of service, here now is Coleen Chung of New York city who is on
her way to sophomore year at Middlebury college to tell you and me what`s
coming up on the show.

Go, Coleen.

COLEEN CHUNG, SOPHOMORE, MIDDLEBURY COLLEGE: Thanks, Lawrence.
Coming up, the first rule of Congress is never tell the truth about
Congress until after you`ve announced your retirement.

A Republican congressman`s rewrite of Capitol Hill is coming up.

And the additions continue for Mitt Romney`s presidential picks, vice
presidential picks. They were on the stage with him today and on their
best behavior. That`s coming there.

O`DONNELL: Fantastic. Nice little saves there on vice presidential
picks.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: What you guys? You guys?

UNIDENTIFIED MALE REPORTER: Have you made that decision yet?

ROMNEY: Sorry, guys. I`ve got nothing for you.

(END VIDEO CLIP)

O`DONNELL: In the spotlight tonight, Mitt Romney moves closer to
making his pick for a running mate with the head of his vice presidential
vetting team in tow, Mitt Romney headed to Colorado today for a round table
campaign event with ten Republican governors, half of them seemed to be
auditioning for a Republican vice presidential nomination.

(BEGIN VIDEOTAPE)

GOV. SUSANA MARTINEZ (R), NEW MEXICO: Governor Romney, I first of all
want to thank you for your proposal on education reform.

GOV. BOBBY JINDAL (R), LOUISIANA: Governor Romney is going to be and
must be our next president because he understands our children only have
one chance to grow up.

GOV. BOB MCDONNELL (R), VIRGINIA: We need President Obama to be the next
president of the United States because he`s a proven job creator. So Mitt,
I want to say as the oldest of five kids that grew up in a real average
middle class family in northern Virginia that I really appreciate your
focus on middle class families.

GOV. CHRIS CHRISTIE (R), NEW JERSEY: Mitt Romney knows how to lead.
His whole life has been about leading men and women of good will and great
intellect, fabulous ingenuity and great integrity to achieve great things.
And he`s going to do exactly the same thing for America as the next
president of the United States.

GOV. NIKKI HALEY (R), SOUTH CAROLINA: I know that when we have
president Romney, somebody is going to have our back. And that`s all we`re
asking for is for someone to have our back. So, thank you. I`m going to
fight for you. We`re all going to fight for you. We`re going to win
together.

(END VIDEOTAPE)

O`DONNELL: The "Wall Street Journal" reported today, Mitt Romney`s
campaign is adding more staff to work with the candidate`s eventual vice
presidential pick. The Romney campaign had renewed speculations Tuesday
about a potential vice presidential pick, well it announced that it will
alert Mitt Romney`s supporters of his VP choice via smart phone app.

The Romney campaign has also announced a four-day bus tour of swing
states, kicking off August 10. A potential rollout day for a Romney
running mate.

Joining me now, John Heilemann, national from New York magazine and
MSNBC political analyst and Nia-Malika Henderson, "Washington Post,"
national political reporter covering the Romney campaign which means, Nia,
you must by now have the Romney VP app on your phone already.

NIA-MALIKA HENDERSON, POLITICAL REPORTER, THE WASHINGTON POST: -
That`s right. Haven`t we all down loaded that app? And this is
reminiscing. Obama did a similar thing in 2008. I don`t think it was an
app at that point because we all had blackberries at that point, but it was
via text message that he alerted everyone that it was Biden.

In some ways though, this is shaping, is it one of these guys on the
short list, either Jindal, Pawlenty or Portman, it`s always shaping up to
be, you know, an anti-climactic pick. There has been so much build-up.
But you almost think that once this thing happens it`s going to be
something like I shaved my legs for this moment because all of these picks
have been so picked over and talked about that you wonder if in the end it
will be something of a letdown, particularly for tea party folks.

If you think about the pick of Sarah Palin, she very much was able to
gin up support in those grassroots. You saw the phones ringing off the
hook in those states and in a lot of door knocking happen because there was
so much excitement around her. But you wonder if it was one of the people
you`re talking about so far if that is going to happen.

O`DONNELL: All right, John Heilemann. I lost patience. Just tell us
who it is. Come on. Come on, you know. I know you know. You`re doing
another book here inside these campaigns.

JOHN HEILEMANN, NEW YORK MAGAZINE: Rob Portman.

O`DONNELL: It`s Rob Portman. OK, thank you.

HEILEMANN: Rob Portman. Rob Portman. And Rob Portman.

O`DONNELL: OK. So, that is why Rob Portman said today, distancing
himself from the Bush budgets. He said when he was the budget director for
George W. Bush and the deficit went through the roof. He said I was
frustrated when I was there about some spending issue specifically as you
know, I wanted to offer a balance budget over five-years and a lot of
people didn`t. I prevail. The president said - sent his budget, not my
budget, his budget, a five balanced budget. But it was a fight internally.

HEILEMANN: Yes, Lawrence. If you think about Rob Portman`s strengths
and weaknesses politically speaking, there`s a long list of them on the
strength side, on both substantive and political. Political Ohio won 55
out of 58 counties when he ran for Senate two years ago. Kind of amplifies
Romney`s message of fiscal strength, management savvy and getting things
done in Washington. He is actually benefited by bipartisan senators
Republican. He`s boring, like Romney is boring.

As you know, doubling down on what you`re selling isn`t always the
worst thing, even if it`s boring, confidence. The only thing that`s really
his weakness politically is the fact that he was tied to George Bush
because he was director of the Management and budget for about a year and a
half. And so, you see him there trying to address the one liability that
he has, there`s no perfect candidate. That` that`s Rob Portman`s weakness
and he`s trying to deal with it.

O`DONNELL: OK, Nia. John has just convinced that it is at least
Portman versus Pawlenty.

HENDERSON: Your guy is Pawlenty.

O`DONNELL: So do you weigh the negatives of Pawlenty versus Portman`s
big negative with the Bush administration.

O`DONNELL: Well I think, you know, Pawlenty`s strengths, I think, for
one is that he`s a governor. And that would allow Mitt Romney to run as an
outside Washington candidate. I think his strengths, that we saw him -- or
his weakness as we very much saw them on display when he was running for
president himself, he just didn`t connect with people. He just didn`t
really catch on fire even in Iowa in that early straw poll there.

So, I think, that`s - those are going to be his weakness. Whether or
not, again, whether or not people look at him and see him as a president.
If he comes across credibly as somebody who can take the role of president
on day one.

Another, I think, weakness for him is he has absolutely no foreign
policy experience. Portman does have some foreign policy by virtue of
being in the senate. He is on the armed services committee. So that I
think, weaknesses are for Tim Pawlenty.

But he does have a sort of regular guy appeal. We know that`s
something that obviously Mitt Romney struggles a great deal with. So, he
would be able to connect with some of those folks of that Mitt Romney for
having been able to do it.

O`DONNELL: Hey John, Pawlenty came in second last time to Sarah
Palin. Is he going to come in second again?

HEILEMANN: I think almost certainly. And I tell you, I think I agree
with everything that Nia-Malika just said. that I add one other thing.
One of the things the vice president`s candidate has to do with the biggest
stage there ever on is there one debate. He is going up against Joe Biden.
If you think that too, of the some of the Nia-Malika pointed Pawlenty was
not a strong campaigner in the Republican nomination fight. Think in
particular about the two Republican debates in which he is took part in.
He was disastrously bad in those debates. And I think the Romney people
recognize one of the great question marks would be is can we actually trust
Tim Pawlenty to at least hold his own with Joe Biden? You have to, at
least, come to a draw if not win that debate. And I don`t think there`s a
lot of confidence around Tim Pawlenty in that area.

O`DONNELL: I maybe not reducing my bet on Tim Pawlenty.

John Heilemann and Nia Henderson. Thank you both very much for
joining me tonight.

HENDERSON: Thanks, Lawrence.

HEILEMANN: Thanks, Lawrence.

O`DONNELL: Coming up, guess who`s being wicked hypocrite call on the
Chick-Fil-a controversy. Mr. Bill O`Reilly who called for more boycotts
than he can remember. Mark Thompson of Sirius X-N radio joins me.

And in the "rewrite" Congress is an alcoholic and needs to watch fight
club.

(COMMERCIAL BREAK)

O`DONNELL: Bill O`Reilly is against the Chick-Fil-a boycott. Finally
there`s a boycott Bill O`Reilly opposes. That`s next.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: You told me after we lost everything that we`re
free to do anything.

UNIDENTIFIED MALE: Congratulations. You`re one step closer.

(END VIDEO CLIP)

O`DONNELL: Tonight. Congress is one step closer to hitting bottom.
I know you think Congress hit bottom sometime after the 2010 election. But
as bad as it`s been, it can get worse. The crazier of the two Republicans
running for Senate in Texas won the Republican nomination there this
weekend. This week, one of the not bat crap crazy Republicans in the house
suddenly announced he would not be run for re-election with less than 100
days before that election.

The main reason congressman Steve LaTourette gave for not running for
re-election is because compromise he said had become quote, "a dirty word."
Today, feeling like an almost free man, unburden of the eight of House
Republican orthodoxy and unburden of the precious of the re-election fund-
raising and campaigning, he said things he has never said before about
congress.

Members of the House and Senate who retire because of the maddening
frustrations of the job often find themselves telling more truths than they
ever did when they were committed to their jobs and committed to their re-
election campaigns. But no one, no one has rewritten his attitude towards
Congress more colorfully and perhaps more honestly than Steve LaTourette
did today now that he is, as he put it, unchained.

(BEGIN VIDEO CLIP)

REP. STEVE LATOURETTE (R), OHIO: Well, thank you all. I`m on the
second day of my unchained tour. Everybody`s most important issue has to
be where we find ourselves on this fiscal cliff. If I thought my presence
here could accomplish what we`re talk about here today, I would stay.
Congress is like an alcoholic who has a problem and needs to fix it.

(END VIDEO CLIP)

O`DONNELL: So, Steve LaTourette thinks Congress is an alcoholic who
hasn`t hit bottom yet and he says Grover Norquist is the bartender. He
talked today about Grove Norquist`s reaction to the Simpson-Bowles plan
which reduces income tax rates but finds other ways to increase revenue
through taxation. When congressman LaTourette supported Simpson-Bowles, he
got a phone call from congress`s bar tender.

(BEGIN VIDEO CLIP)

LATOURETTE: The thing that drove me crazy and I don`t want to pick on
one guy, but when we rolled it out, Grover Norquist called me and said
you`re raising taxes $2 trillion. He said we don`t look at individual tax
rates. We look at the aggregate of tax revenue versus GDP. And I said
crap, I mean, nobody where I grew up understands that kind of baloney.

(END VIDEO CLIP)

O`DONNELL: Now, if only about another 50 Republican members of
Congress could understand that Congress` bartender is really serving them
baloney, they might actually be able to get something done.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: What I tweeted was I`m a Kentucky fried chicken
fan. That`s where my loyalty lies.

(END VIDEO CLIP)

O`DONNELL: Chick-Fil-a said yesterday`s Mike Huckabee led Chick-fil-a
appreciation day was, quote, "record setting." Tomorrow, Chick-Fil-a will
get to provide a tradition of service that they`ve always prided themselves
on to the other side of the debate. Same-sex couples plan kiss-ins at the
fast food chain. Now, I know what you`re thinking, what does America`s
king of boycotts think about Chick-Fil-a?

(BEGIN VIDEO CLIP)

BILL O`REILLY, FOX TV HOST: Organized economic retaliation is not
what America is all about.

(END VIDEO CLIP)

O`DONNELL: Organized economic retaliation isn`t what America is all
about? It`s what American was born in. That`s what the Boston tea party
was, organized economic retaliation. What about the United States
disinvestment in South Africa during apartheid? Or have you heard of Cuba,
Bill O`Reilly? The most crippling, longest boycott possibly in human
history. You don`t get more American than the Cuban boycott. Bill has
more to say.

(BEGIN VIDEO CLIP)

O`REILLY: If you don`t like him, don`t buy his product. "Talking
points" is fine with that. But the pressure others to think like you, is
wrong.

(END VIDEO CLIP)

O`DONNELL: To pressure others to think like you is wrong. This is
from Bill O`Reilly who is saying this. This guy has led boycotts of
France, you know, not just little things like a fast food chain. He even
lifted his ban on France in 2007, but he still has a boycott France page on
his Web site.

In August 2002, O`Reilly called for a boycott of Pepsi after it
announced an endorsement deal with rapper Ludacris. He told his viewers,
I`m calling for all Americans to say hey, Pepsi, I`m not drinking your
stuff. You want to hang around with Ludacris? You do that. I`m not
hanging around with you.

Joining me now, Mark Thompson, host of "Making a Plane" on Sirius X-N
Radio. A guy, I like to hang around with. This brings out the madness on
that side of the world. O`Reilly pretending oh, we`ve never done that.
Boycotts around Americans, forgetting Cuba and his own boycotts. But take
me through what you see happening here.

MARK THOMPSON, HOST, SIRIUS X-N RADIO: Well, it`s another example of
their right wing contradiction. First of all, they like to argue that
money is speech. It is also very unwise for business and these also
individuals would like to promote and encourage a business.

Lawrence, LGBT Cubans spends just as well as anyone else is. So, why
would you want to ostracize that part of the community? Second of all, to
say withhold your money and not boycott is actually worse. Because of
boycott in a movement leaves opportunity for negotiations, for demands to
be met. And if the company responds to negotiations, giving them an
opportunity to be a good actor, sometimes it`s worse just for there to be a
general culture brewing that says none of us should spend our money at
chick-Fil-a. So, it`s really bad for business as well.

So again, this is just more of their contribution in the name of
continuing to be discriminatory.

O`DONNELL: And Rush Limbaugh, by the way, announced he`s eating
Chick-fil-a now. He didn`t say whether he`s having it for breakfast or for
lunch or for dessert like we just don`t know or exactly what went -- .

THOMPSON: He doesn`t need to eat any more Chick-Fil-a.

O`DONNELL: He doesn`t. Where does it go from here?

THOMPSON: Well, you know again, I think it`s unfortunate. And we
have to be very, very clear that -- and not separate these matters.
Attacks on LGBTQ community , the war on women, war on African-Americans
with voter ID, the war against Latino community, it is a part of the
overall strategy to plunge us, I think, into what is appearing to be a
second nadir.

O`DONNELL: Mark Thompson of Sirius XM Radio gets tonight`s last word.
"THE ED SHOW" is up next.

END

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