updated 9/25/2012 10:54:22 AM ET 2012-09-25T14:54:22

THE LAST WORD WITH LAWRENCE O`DONNELL
September 24, 2012

Guests: Ted Strickland, Howard Dean, Jonathan Cohn, Steven Frushtick, David Cay Johnston, Karen Finney


LAWRENCE O`DONNELL, HOST: Here it is. It`s kind of heavy, but the
most manipulated tax return in the history of presidential campaigns has
been released, all 400 pages of it. But the ones we really want to see,
the ones that could unmask Mitt Romney as a tax criminal, they`re still
secret.

(BEGIN VIDEOTAPE)

CHUCK TODD, NBC NEWS: Mitt Romney will campaign more aggressively in
battleground states this week.

ANDREA MITCHELL, NBC NEWS: The campaign reset for Mitt Romney is
officially under way.

REPORTER: How do you turn this thing around?

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: Well, it doesn`t need to
turn around.

ALEX WAGNER, MSNBC HOST: The Romney-Ryan campaign launches a three-
day bus tour through Ohio.

CHRIS JANSING, NBC NEWS: His path to victory is pretty small.

UNIDENTIFIED MALE: No Republican presidential candidate.

ROMNEY: (SPEAKING FOREIGN LANGUAGE)

UNIDENTIFIED MALE: No Republican presidential candidate has been
elected president without winning Ohio.

UNIDENTIFIED FEMALE: He`s got to offer specification.

ROMNEY: I could tell them specifically what my policy looks like.

UNIDENTIFIED MALE: He just seems to be saying the first thing that
pops into his head.

ROMNEY: Creating more jobs.

UNIDENTIFIED MALE: He seems to be bouncing around.

ROMNEY: The devil is in the details. The angel is in the policy.

UNIDENTIFIED MALE: Romney is losing it.

UNIDENTIFIED MALE: The Romney campaign is really struggling.

UNIDENTIFIED MALE: What is he going to offer?

REPORTER: What`s your big idea?

ROMNEY: Freedom.

UNIDENTIFIED FEMALE: Where is the core Mitt?

MICHAEL STEELE, FORMER RNC CHAIR: Are you willing to expose yourself?

ROMNEY: I think this is an election about a choice. This is a
campaign about a choice.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: He seems to only have
one note.

ALEX WAGNER, MSNBC HOST: No, not Mitt Romney.

OBAMA: Tax cuts for the wealthy.

ROMNEY: That`s essentially it.

UNIDENTIFIED MALE: That is not a strategy to win. That is a strategy
to lose.

ROMNEY: I pay all the taxes that are legally required and not a
dollar more.

WAGNER: The campaign released his 2011 tax documents.

MITCHELL: The taxes that came out on Friday.

WAGNER: On Friday afternoon.

MITCHELL: Take out the trash day.

ROMNEY: I pay all the taxes that are legally required and not a
dollar more.

WAGNER: Romney actually paid more than he needed to.

UNIDENTIFIED MALE: He`s a big shape shifter outside of Harry Potter.

UNIDENTIFIED MALE: They are clearly worried.

ROMNEY: We`re going to win. There`s no question in my mind.

REP. NANCY PELOSI (D), CALIFORNIA: Mitt Romney is not going to be
president. I think everybody knows that.

ANN COULTER, CONSERVATIVE COMMENTATOR: If we don`t run Chris
Christie, Mitt Romney will be the nominee and we`ll lose.

(END VIDEOTAPE)

O`DONNELL: With 43 days until the presidential election, the Romney
campaign is being attacked by Republicans who want Mitt Romney to win but
worry that he is stuck with a losing strategy, and the Obama re-election
campaign, as predicted by Ann Romney, is using the Romney tax returns as
ammunition.

(BEGIN VIDEO CLIP)

OBAMA: Governor Romney on 60 minutes was asked, does he think it`s
fair that he pays a lower tax rate than somebody who is making $50,000 a
year? And he said yes. I think it`s fair and I also think that`s the way
you get economic growth.

I`ve just got a different vision about how we grow an economy. I
think, Barbara, that you grow an economy from the middle out, not from the
top down.

(END VIDEO CLIP)

O`DONNELL: Today, the Obama re-election campaign released this ad in
Ohio.

(BEGIN VIDEO CLIP)

NARRATOR: Mitt Romney attacked 47 percent of Americans who pay no
income tax, including veterans, elderly, the disabled.

ROMNEY: My job is not to worry about those people.

NARRATOR: Doesn`t the president have to worry about everyone? Mitt
Romney paid just 14.1 percent in taxes last year. He keeps millions in
Bermuda and the Cayman Islands. He won`t release his tax returns before
2010. Maybe instead of attacking others on taxes, Romney should come clean
on his.

(END VIDEO CLIP)

O`DONNELL: Today, New Jersey Republican Governor Chris Christie
struggled to and failed to come up with pro-Romney spin. "We had a bad
week. If the election were going to be held tomorrow, that would be a
problem."

That`s what Chris Christie says.

On "FOX News Sunday," "Weekly Standard" conservative columnist Bill
Kristol actually found himself complimenting the Obama administrations`
record while advising the Romney campaign to focus on the next four years
instead of the last four years.

(BEGIN VIDEO CLIP)

BILL KRISTOL, WEEKLY STANDARD: They need to focus on the next four
years. I`ve talked this for months. If this election is just about the
last four years, it`s a muddy verdict. Bush was president during the
financial melt down, the Obama team has turned that around pretty well.

(END VIDEO CLIP)

O`DONNELL: And moderate Republican columnist David Brooks thinks he
knows a moderate Republican when he sees one. And that Mitt Romney is
faking it when he tries to sell right wing extremism.

(BEGIN VIDEO CLIP)

DAVID BROOKS, COLUMNIST: Mitt Romney does not have the passion for
the stuff he`s talking about. He`s a problem solver. I think he`s a non-
ideological person running in an extremely ideological age. And he`s
faking it.

(END VIDEO CLIP)

O`DONNELL: Rush Limbaugh who pretty much hates everything that David
Brooks has to say, reacted this way to David Brooks on his radio show
today.

(BEGIN VIDEO CLIP)

RUSH LIMBAUGH, RADIO HOST: Ideological age that Romney can`t do it?
Isn`t that why you told us he would be the best nominee? Am I wrong -- am
I missing something here? Isn`t that why Brooks and others told us we had
to nominate Romney because -- precisely because he wasn`t ideological and
that would be necessary to get the independents. And I give Brooks one
thing, if Romney would go ideological in explaining Obama, it would help.

(END VIDEO CLIP)

O`DONNELL: A new political national poll of likely voters shows
President Obama leading Mitt Romney by three points, 50 percent to 47
percent.

Tonight, Nate Silver of "The New York Times" "FiveThirtyEight" blog
forecasts that on November 6th, President Obama will within 309 Electoral
College votes. Mitt Romney will win 229 Electoral College votes. And
President Obama has a 78 percent chance of winning the election.

Today, Paul Ryan picked off the Romney campaign`s three-day bus tour
through Ohio, where a new poll of Ohio likely voters shows President Obama
leading Mitt Romney by five points, 51 percent to 46 percent. No
Republican has won the presidency without winning Ohio.

Mitt Romney will join the Ohio bus tour tomorrow. He and Paul Ryan
will be then followed by the Democratic National Committee`s own Ohio bus
tour which will stop in the same cities. The DNC`s bus tour is called Mitt
Romney writing off the middle class tour.

Joining me now from the DNBC bus tour in Columbus, Ohio, Obama
campaign national co-chair and former Ohio governor, Ted Strickland. And
from New York, MSNBC`s Krystal Ball and Steve Kornacki.

Let`s take a look at this ad that the Romney campaign has now
released.

(BEGIN VIDEO CLIP)

NARRATOR: Fewer Americans are working today than when President Obama
took office. It doesn`t have to be this way. If Obama would stand up to
China, Obama had years to stand up to China. We can`t afford four more.

(END VIDEO CLIP)

O`DONNELL: Governor Strickland, your reaction to that Romney ad?

TED STRICKLAND (D), FORMER OHO GOVERNOR: Well, I mean, it`s a joke.
Everyone knows that President Obama has done more than any previous
president to make sure that our trade laws are fairly enforced. And he has
taken action against China to protect the tire industry, for example, auto
parts industry and so on.

Mitt Romney is the guy who was a pioneer of outsourcing and Mitt
Romney even today has some of his personal resources invested in China.
So, I think it`s a hollow charge. I don`t think Ohioans -- I don`t think
Americans are going to fall for this.

O`DONNELL: Let`s look at more of what`s going on in the intramural
squabbles within the Republican world, Bob Schieffer with Peggy Noonan.
Let`s listen to this.

(BEGIN VIDEO CLIP)

BOB SCHIEFFER, CBS NEWS: You called a Romney campaign this week a
rolling calamity. Did you get any blow-back from your Republican friends
on that?

PEGGY NOONAN, WALL STREET JOURNAL: Privately, the constant
communication I got was thank you for saying that. They need help with the
Romney campaign. They need to be woken up. They need to raise their game.

People in America now who talk about politics they throw around
numbers. There`s the unfortunate 47 percent from Mitt. There`s the only
we need 51 percent to win.

Maybe their essential problem was they were slicing and dicing in
America. Go bigger.

(END VIDEO CLIP)

O`DONNELL: Krystal Ball, it seems like it`s a good thing that the
Obama campaign has not been listening to Peggy Noonan.

KRYSTAL BALL, "THE CYCLE": Good thing for who?

O`DONNELL: Good thing for the Obama campaign.

BALL: Yes, I would agree with that. I mean, I think one of the
reasons we`re seeing so many Romney campaign allies coming out and
expressing their frustrations in such stark terms as Peggy Noonan has is
that the Romney campaign has been so all over the place in terms of their
message that even if you wanted to be defending them, you have to have some
sense of where they`re going and what their core message is to be able to
defend that core message.

So, if you are a Peggy Noonan, if you are a Bill Krystal, if you are a
David Brooks, and you`re trying to figure out, OK, how do I help this guy,
how do I defend him, you can`t do it when you have no idea what the central
campaign message is this late in the game.

O`DONNELL: Let`s listen to what Mitt Romney said about the details of
his tax reform plan on "60 Minutes."

(BEGIN VIDEO CLIP)

ROMNEY: I will make sure that we bring down rates, we limit
deductions and the exceptions, so we keep the progressivity in the code.
And we encourage growth in jobs.

REPORTER: And the devil`s in the details, though. What are we
talking about, the mortgage deduction? The charitable deduction?

ROMNEY: The devil is in the details. The angel is in the policy,
which is creating more jobs.

(END VIDEO CLIP)

O`DONNELL: Steve Kornacki, Mitt Romney is not going near that devil,
that detail devil is not going to trap him.

STEVE KORNACKI, THE CYCLE: So you don`t buy the idea that everybody
gets a tax cut, it`s deficit neutral, and we`ll figure out the details
later. I think that`s basically the problem in a nutshell for the Romney
campaign and it`s part of the reason I think why you have Republicans like
Peggy Noonan and many others now starting to panic publicly, you know, so
publicly and it`s this. The sort of central element of the Romney
strategy, the central calculation with the Romney campaign, main in his
campaign, was that economic anxiety among swing voters was going to have
the attitude of we don`t want to ask questions, we just want to vote the
incumbent out.

I mean, they looked at George Bush Sr. in 1992, they looked at Jimmy
Carter in 1980, they looked at Barack Obama in 2012 and they said, we`ve
got the same thing this year. We need to be a generic protest vehicle. We
need to be as inoffensive and nonspecific as possible to swing voters.

And what they`re finding out is that strategy is good for about 45
percent, 46 percent, 47 percent of the vote. It has not gotten them higher
all year. There`s no reason to think that that strategy alone is going to
left them over the top. And now, you`ve got basic dilemma where
Republicans are starting to panic and Mitt Romney has choices. He can
start saying something more affirmative but if he wants to appeal to swing
voters, he`s going to really irritate his base. Or he gives the base and
the Limbaugh crowd, like you play there, what they want, he`s going to
alienate the swing voters.

So, the strategy he`s been running on I think they`re just finding out
now it`s not getting them quite where they thought it was going to.

O`DONNELL: Let`s listen to the advice Bill O`Reilly has for Mitt
Romney about how to handle the tax details question.

(BEGIN VIDEO CLIP)

BILL O`REILLY, FOX NEWS ANCHOR: I would say listen, with all due
respect, Scott, I can`t tell you right now, because it`s not fully
formulated what I can do in that area. I don`t want to hurt the housing
industry. I don`t want to hurt the charitable industry. However, we`re
going to take a look at all of it, we`re going to come to a consensus in
Congress and we`re going to bring it down. I think that would be a good
answer, would it not?

(END VIDEO CLIP)

O`DONNELL: Governor Strickland, I want you to imagine in your
political career, that you were on a debate stage with Bill O`Reilly, who
had a tax plan that when he was questioned about it, he said on that debate
stage in front of you, I can`t tell you right now because it`s not fully
formulated.

How do you think he would score with a debate like that?

STRICKLAND: What a pathetic answer, even for Bill O`Reilly it`s a
pathetic answer. The fact is that Mitt Romney stands for nothing. Jon
Huntsman had it right in the primaries when he said that Mitt Romney was
like a well-oiled weather vane.

This man seems to have no core convictions and consequently his
campaign is floundering. It`s flopping back and forth. Even his
supporters don`t really know what he stands for because he doesn`t stand
for much, except for tax cuts for really wealthy people.

That`s the core of his campaign and I think that`s the problem. And I
think that`s why here in Ohio, he`s not going over very well. And this
latest poll in Ohio I think is an accurate reflection of what`s going to
happen in Ohio come November 6th. And as you said, Lawrence, no Republican
has won the presidency without winning Ohio and Mr. Romney, Governor Romney
is not doing well in Ohio right now.

O`DONNELL: Governor, can you imagine presenting yourself as a
candidate to Ohio, just Ohio voters as you`ve done, or elsewhere, where you
say -- I have a tax plan. I`m going to change your tax returns in very
significant ways. However, I can not tell you about that. You`re just
going to have to vote for me and then you`ll find out whether you still
have a mortgage deduction, whether you can still deduct state and local
taxes. You`ll find all that out later after you elect me.

Can you -- I mean, I`ve never heard this kind of presidential on taxes
by a candidate before, and I just can`t quite imagine a politician thinking
that could work.

STRICKLAND: Well, I mean, this is an inept campaign, obviously. But
I don`t know why Mr. Romney wants to talk about taxes because whenever he
talks about taxes, it just reminds people of his own tax returns that we
haven`t seen.

And, Lawrence, he paid what, 14 percent -- 14.1 percent on massive
amounts of money that he received. The average Ohioan pays 20.1 percent in
federal income tax compared to Mitt Romney`s 14.1 percent.

That fact alone should cause Mitt Romney to want to stay away from the
discussion of taxes. But I still think that there`s something in his tax
returns that would be so damaging that he knows that it would be a deal
breaker with the American people and that`s why we probably will never see
his tax returns.

But I think that`s very telling and I think that, as well as the
Cayman Islands, the Swiss bank account, his investments in multiple
countries around the world, the fact that he called Paul Ryan`s budget a
marvelous budget. He knew what that budget would do to the middle class.

So, this man`s got lots of problems and I don`t think he can solve
them in the next 44 or 43 days.

O`DONNELL: Former Ohio Governor Ted Strickland, Krystal Ball, and
Steve Kornacki, thank you all for joining me tonight.

BALL: Thanks, Lawrence.

STRICKLAND: Thank you.

O`DONNELL: Coming up, another episode of Mitt versus Mitt. On "60
Minutes" last night, Mitt Romney contradicted once again, Mitt Romney.

And in the rewrite tonight, the things Paul Ryan can`t say anymore
thanks to Mitt Romney. For example, Paul Ryan never talks about the Cayman
Islands anymore. And he used to talk about the Cayman Islands.

And tomorrow is the last day that crazy Congressman Todd Akin can drop
out of the Missouri Senate race which every Republican, including Mitt
Romney wants him to do. So why was Newt Gingrich at Todd Akin`s side today
urging him to stay in?

Newt can`t stop making trouble for Mitt. That`s coming up.

(COMMERCIAL BREAK)

O`DONNELL: Mitt Romney`s latest idea for medical care for the
uninsured puts him in conflict with Mitt Romney. Mitt versus Mitt is
coming up next.

And later, it`s Mitt versus Newt in Missouri. That`s coming up.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

REPORTER: Does the government have a responsibility to provide health
care to the 50 million Americans who don`t have it today?

ROMNEY: Well, we do provide care for people who don`t have insurance.
If someone has a heart attack, they don`t sit in their apartment and die.
We pick them up in an ambulance and take them to the hospital and give them
care. And different states have different ways of providing for that care.

(END VIDEO CLIP)

O`DONNELL: That was Mitt Romney last night on "60 Minutes."

Here`s what Mitt Romney said to essentially the same question two
very, very long years ago.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Do you believe in universal coverage?

ROMNEY: Oh, sure. It doesn`t make a lot of sense for us to have
millions and millions of people who have no health insurance and yet who
can go to the emergency room and get entirely free care to which they have
no responsibility -- particularly, if they`re people who have sufficient
means to pay their own way.

(END VIDEO CLIP)

O`DONNELL: Joining me now, former chairman of the Democratic National
Committee and Vermont governor, Dr. Howard Dean, and Jonathan Cohn, the
senior editor at the "New Republic" and author of the book, "Sick".

Governor Dean, you know, that would be the gotcha tape. On any other
campaign, it would be, oh, look at this he`s in complete contradiction with
himself only 24 months ago. But in the Romney campaign, you just add it to
this giant bonfire of these things that I don`t know how to make sure these
things get the right weight in this campaign, because there are so many of
them.

HOWARD DEAN, FORMER DNC CHAIRMAN: Here`s the thing that are amazing
to me about what he said. Here`s the guy that put in universal health
insurance in Massachusetts. He essentially used the same plan that
President Obama used. And he doesn`t appear to know what he`s talking
about.

He knows -- anybody who puts in a plan knows like this should know you
can go to the emergency room and get either good continuity of care,
preventive care, or inexpensive care.

I can`t -- I just don`t know what to think of this. This is so far --
he doesn`t appear to know what he`s talking about. Here`s the guy, the
governor who presided over the farthest reaching universal health care plan
to date in the United States today. I don`t know what to say. I`m
speechless.

O`DONNELL: Well, Jonathan Cohn, he clearly did know what he was
talking about on "MORNING JOE" there with Mike Barnicle, and he worked
enough on the issue in Massachusetts to know what he was talking about.
And that appearance on "Morning Joe" was at the beginning of this
presidential campaign. I mean, that`s 2010, he knows then that he`s going
to be running for president. So he`s giving a campaign answer then which
he can no longer give, apparently.

But as the governor just mentioned, one of the things -- one of the
things that you can get at the emergency room is a very, very big bill that
can put you into bankruptcy, isn`t it?

JONATHAN COHN, THE NEW REPUBLIC: That`s right. You know, the
emergency room is a great place to get patched up, if you have a true
emergency, if you have a heart attack, if you`re bleeding from an open
wound, but it takes only a few hours in the emergency room to run up a bill
not just in the thousands of dollars, but we`re talking tens of thousands
of dollars. And there are very few people who can pay that.

That`s the one of the problems in the emergency room. The bills get
very expensive, people can`t pay it and the cost gets passed on to the rest
of us in the form of higher taxes or insurance premiums.

And, as you said, you know, nobody knows that better than -- well,
Governor Romney who used to make that argument all the time.

O`DONNELL: He used to make the argument that you just made, and he
used to call the system that he is now in favor of socialism. Let`s hear
the way he said that a few years ago.

(BEGIN VIDEO CLIP)

ROMNEY: When they show up at the hospital, they get care. They get
free care paid for by you and me.

UNIDENTIFIED MALE: Right.

ROMNEY: If that`s not a form of socialism, I don`t know what is.

(END VIDEO CLIP)

O`DONNELL: Governor Dean, there he is again.

DEAN: That`s a ridiculous statement that he just said. Socialism is
the Veterans Administration, where the government owns the hospital and
hires the doctors. Socialism is nothing to do with our American system.

What we have in the United States -- what he was just describing is in
fact the system that everybody lives under. Somebody is always paying for
somebody else. It`s incomprehensible to me that a governor who did what he
did could even think these things.

O`DONNELL: Well, isn`t -- Jonathan, isn`t this just the politics of
where he is now? That his party has driven so far to the right on this
that they simply won`t allow a candidate who knows better to give any other
answer than what, this was the answer George W. Bush used to give, by the
way, is that hey, they can go to the emergency room.

COHN: That`s exactly right. I mean, the great thing about Romney --
I mean, I remember when he did this in Massachusetts and I followed it very
closely. The great thing about Romney was he spoke about universal
coverage but he made a conservative case for it. He was making the
argument for individual responsibility. But he also understood if you were
going to demand people take responsibility, you had to guarantee them
health care.

In today, today`s Republican Party, guaranteeing health care for
people was considered too much. You know, that`s big government. That`s
horrible. We can`t guarantee health care to everybody.

So Romney now is turning himself into a pretzel because he can`t admit
that`s what he did in Massachusetts, and that`s what he used to think was a
perfectly good idea.

O`DONNELL: We have a bunch of different clips here that we could show
of Romney making exactly the opposite case of what he said on "60 Minutes".

But I want to go to some polling information that we have and make
sure we get this in. It indicates that the health care issue is hurting
Romney with seniors. A new "Reuters" poll finds that Romney is losing
their support. Before the Democratic convention, Romney led among seniors
by 20 points and now Romney leads President Obama among seniors by less
than four points.

That is a dramatic drop, Governor Dean.

DEAN: It is a dramatic drop. And that`s partly because of the
addition of Paul Ryan.

You can`t -- Sarah Palin said you can put lipstick on a pig but it`s
still a pig. Paul Ryan`s program was the elimination of Medicare. That`s
what it was, turned it into a voucher program/

And I believe that Barack Obama is going to get elected president of
the United States because he`s going to take not just Florida, but Florida
and Ohio and that`s the death knell for any Republican ticket.

You know, go bold might have been a great idea, but the bold person he
picked was really badly cut into his margin with seniors. I think at the
end of the day, it`s conceivable that Obama will actually win the senior
vote.

O`DONNELL: Howard Dean and Jonathan Cohn, thank you very much for
joining me tonight.

COHN: Thanks for having me.

DEAN: Thanks.

O`DONNELL: Coming up in the rewrite. The things Paul Ryan just can`t
say anymore because he doesn`t want to get in trouble with Mitt.

And we`ll look into the most manipulated tax return in history. David
Cay Johnston joins me.

(COMMERCIAL BREAK)

O`DONNELL: In the spotlight tonight, Willard M. and Ann D. Romney`s
379 page income tax return for 2011.

(BEGIN VIDEO CLIP)

ROBERT GIBBS, OBAMA CAMPAIGN MANAGER: We saw him manipulating his own
tax returns to try and plump up his portion of taxes to 14 percent.

UNIDENTIFIED MALE: You`re talking about not taking the charitable
deductions.

GIBBS: Right. Last -- two months ago, on your own air, he said that
anybody who didn`t take the deductions they were owed wasn`t qualified to
be president. Well, I guess he`s not qualified because that`s exactly what
he did last week to try get his number up from nine or 10 percent to 14
percent.

It`s fair to say that a lot of those 47 percent that he was slandering
earlier in the week probably pay more -- a higher percentage of their
income in taxes overall than he does.

(END VIDEO CLIP)

O`DONNELL: Along with the 2011 tax return, on Friday, the Romney
campaign released a statement from PriceWaterHouse Coopers that said "the
lowest effective personal income tax rate that Romney enjoyed since 1990
was 13.6 percent, and the average rate that Mitt Romney enjoyed since 1990
was 20 percent."

Joining me now, David Cay Johnston, Pulitzer Prize winning tax
reporter, a professor at Syracuse University and the author of the new book
"The Fine Print," and Steven Frushtick, a certified public accountant and
managing partner of the accounting firm Weiner Frushtick and Straub. He
specializes in high net worth individuals.

David Cay Johnston, what have we learned?

DAVID CAY JOHNSTON, AUTHOR, "THE FINE PRINT": Well, Romney, as you
just showed in the clip, by his own standard, has about 500,000 reasons
he`s disqualified to be president. He didn`t take the full deduction, at
least for the moment. He can of course, if he doesn`t win, file an amended
tax return over the next three years and take the full charitable
deduction.

We still haven`t seen his 2009 return, which would be when, if he
sought any forgiveness from the U.S. government for having undeclared
account or if he was involved in the UBS criminal tax shelter activities in
any way, that would have come forward, among many other things we haven`t
learned about.

O`DONNELL: Steven Frushtick, what would we look for in the 2009
return that Romney is refusing to release? That`s the one where he would
have been able to take advantage of a special amnesty program that the IRS
had to forgive any criminal liability for having offshore accounts that had
not been declared. We would find that in the 2009 return?

STEVEN FRUSHTICK, CERTIFIED PUBLIC ACCOUNTANT: No, that`s not
correct. You would not find the -- the form you`re talking about is called
an F-Bar. It`s 90-22. And the F-Bar is not part of the tax filing. It`s
done by June 30th each year without extension.

So in the 2009 tax return itself, you would not find this form,
whether he filed it or not. And that amnesty is a little bit misleading,
because the amnesty still required everybody to pay 20 percent at that
time, on the first amnesty program, of the highest value of their account.
So although the amnesty was from criminal prosecution, there was a fairly
heavy tax burden on the highest value of the account.

But you would not see that in his 2009 actual filing. The F-Bars were
not part of the tax return.

O`DONNELL: And what reasons are there, Steven, to put money in the
Cayman Islands other than, as Paul Ryan used to say, to hide your money?

FRUSHTICK: There are investment opportunities that could be available
elsewhere. Frankly, he`s paying tax on all of his income, so the fact that
the money is in the Cayman Islands, he`s created a different trust there to
protect it from possible liabilities. But all of the income gets reported,
whether it`s in the Cayman Islands or in Luxemburg or on 42nd Street. It`s
all reported income.

O`DONNELL: And David Cay Johnston, how much control does the blind
trust have that delivers this income to Romney every year. How much
control do they have over how much income gets delivered?

JOHNSTON: Well, a great deal. And one of the curious things is,
remember the draft we saw of the 2011 return, it showed seven million
dollars more income than ultimately showed up on the filed 2011 return.
That`s not exactly a small difference in how this was calculated. By not
seeing in addition, Lawrence, his previous years` returns, if he owed taxes
in the past, then you would see these adjustments through his tax returns.

It`s very significant that the PriceWaterHouse letter talks about
taxes owed rather than paid in various years, and uses a term of art, as
prepared, not as ultimately filed or refiled under a 1040 X. That`s an
amended return after the fact.

O`DONNELL: Steven, the -- in your experience -- I`ve talked to tax
practitioners, both lawyers and accountants with the -- who have dealt with
a lot of these Cayman Islands accounts and foreign account. They`re
telling me that in their practice and in their experience, there has been a
very, very, very big use of this amnesty that was provided to get those
accounts into a legal status.

Has that been your experience with those accounts?

FRUSHTICK: Yes. Well what happened is many banks, UBS in particular,
had to come forth with less of all of their accounts, account holders in
Switzerland. And many of those people were brought in by the IRS and had
to file back tax returns for 10 years and also pay that 20 percent that I
referred to, which is now up to 27.5 percent for the people who didn`t take
advantage of the first amnesty.

So there`s no question that a tremendous amount of tax has been raised
by the Internal Revenue Service on bringing these people into the fold.

O`DONNELL: And David Cay Johnston, bringing them into the fold is
kind of a charitable term for making them law-abiding.

JOHNSTON: Yes, that`s exactly what it is. And this was a forgiveness
for improper conduct. I`ve been calling on Romney for a long time to
release all of these returns back to `84. He won`t even give us year by
year accounts and he won`t tell us and won`t answer questions about when
did you actually pay the taxes that you owed.

O`DONNELL: Steven Frushtick and David Cay Johnston, thank you very
much for joining me tonight.

FRUSHTICK: OK, thank you.

O`DONNELL: Coming up, with just one day left for Republicans to
convince crazy Todd Akin to quit the Senate race in Missouri, Newt Gingrich
goes to Missouri to convince Akin to stay in. What is Newt up to?

And in the Rewrite, Paul Ryan has to keep Rewriting Paul Ryan now that
he has to keep pleasing Mitt Romney, not to mention American voters.

(COMMERCIAL BREAK)

O`DONNELL: In tonight`s Rewrite, Paul Ryan continues to rewrite Paul
Ryan on the many things that Paul Ryan can no longer say now that he`s Mitt
Romney`s running mate. Two years ago, Paul Ryan said, correctly, that the
Cayman Islands are, quote, "the place you hide your money."

See? Paul Ryan can be right sometimes. But he can`t be right about
the Cayman Islands anymore, thanks to Mitt Romney. So he just doesn`t
mention the Cayman Islands anymore. And a few years ago, Paul Ryan said
this about his favorite philosopher.

(BEGIN VIDEO CLIP)

REP. PAUL RYAN (R), VICE PRESIDENTIAL CANDIDATE: I grew up reading
Ayn Rand and it taught me quite a bit about who I am and what my value
systems are and what my believes are. It`s inspired me so much that it`s
required reading in my office for all my interns and my staff.

The reason I got involved in public service, by in large, if I had to
credit one thinker, one person, it would be Ayn Rand. Then when I -- I
guess I wasn`t the only one, but when I and others pointed out that Ayn
Rand was an atheist, which I did simply to make a religion exploiting
Republican politician uncomfortable, not because I think there`s anything
wrong with atheist philosophers, Paul Ryan was then forced to say this: "I
reject her philosophy. It`s an atheist philosophy."

Which was exactly what those of us who were trying to expose him as a
craven politician were hoping he would say. In that same speech where Paul
Ryan swore his devotion to an atheist radical Russian philosopher, Paul
Ryan said this about Social Security.

(BEGIN VIDEO CLIP)

RYAN: Social security right now is a collectivist system.

(END VIDEO CLIP)

O`DONNELL: Collectivist, in Ryan and Rand speech, is just another
word for communist. So there was Paul Ryan, an elected Republican
congressman at the time, calling this country`s most popular government
program a communist system. Paul Ryan very clearly and very publicly was
saying he hated Social Security, hates it, every bit as much as he hates
communism, because in Paul Ryan`s thinking, Social Security is a communist
system.

That quote has proved inconvenient for him now that he`s running with
Mitt Romney. And he is asking America to entrust the future of Social
Security to a Republican presidency and a Republican Congress. And in
Ryan`s case, to a Social Security hating vice president.

This weekend, Craig Gilbert of the "Milwaukee Journal Sentinel"
confronted Paul Ryan on having characterized Social Security as a
collectivist program, to which Ryan said simply, quote, "I don`t think of
it like that."

Now we can only hope that Paul Ryan thinks that if his debate with Joe
Biden is going to have that question come up, that it`s going to be that
easy. We can only hope that Paul Ryan thinks that if Martha Radditz of ABC
News, the debate moderator for that debate, raises that quote of Paul Ryan
calling Social Security a communist program, that he can simply say, I
don`t think of it like that, and just move on.

In that same interview with the "Milwaukee Journal Sentinel," the
thin-skinned Paul Ryan claimed about conservative pundits criticizing the
Romney campaign last week that they were just doing what they always do.
Ryan said "I think that`s just what conservatives do by nature. I think
that`s just the nature of conservative punditry, is to do that, to kind of
complain about any imperfection they might see."

But of course, they don`t. Conservative pundits get behind the
nominee no matter what. And conservative pundits are behind Mitt Romney
and Paul Ryan. Now some of them could not contain their shock at the sheer
stupidity of what Romney said on that secret tape at his fundraiser, where
he managed to insult and lie about 47 percent of Americans. But those
conservative pundits do all support Romney`s election. And some of them
have had to do more than a little Rewriting of their attitudes toward
Romney to get behind Mitt Romney in this election.

But they`re all good soldiers. And they all, they all fall in line.

(BEGIN VIDEO CLIP)

ANNE COULTER, CONSERVATIVE COLUMNIST: I may as well tell you what my
prediction is. I think -- well, I`ll put it in a nutshell. If we don`t
run Chris Christie, Romney will be the nominee, and we`ll lose.

Mitt Romney is definitely the one we need now.

Mitt Romney is definitely the one we need now.

Mitt Romney is definitely the one we need now.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

NEWT GINGRICH (R), FORMER HOUSE SPEAKER: If Todd and the people of
Missouri prove it`s a close race, what`s the moral base for not backing the
Republican nominee?

(END VIDEO CLIP)

O`DONNELL: Newt Gingrich was in Missouri today causing trouble for
Mitt Romney and campaigning for Republican Senate candidate Todd Akin, a
candidate many in the Republican party called on to leave the race after he
said this.

(BEGIN VIDEO CLIP)

REP. TODD AKIN (R), CANDIDATE FOR SENATE: If it`s a legitimate rape,
the female body has ways to try to shut that whole thing down. But let`s
assume that maybe that didn`t work or something. You know, I think there
should be some punishment, but the punishment ought to be on the rapist and
not attacking the child.

(END VIDEO CLIP)

O`DONNELL: The legitimate rape candidate has since apologized and
Newt seems to think that Akin will have no problem regaining support from
his fellow Republicans, including Mitt Romney.

(BEGIN VIDEO CLIP)

GINGRICH: My expectation would be in the crunch, in October, Governor
Romney is going to be for the entire ticket, and he`s going to be for Todd
Akin. And clearly Governor Romney has to carry Missouri in order to win
the presidency. And when he carries Missouri, he makes it almost
impossible for Claire McCaskill.

How many people are going to split their ticket and have a
Romney/McCaskill ticket? OK. So I think that`s why, frankly, in the end,
I believe that Todd Akin is the next senator from Missouri.

(END VIDEO CLIP)

O`DONNELL: Tomorrow is the deadline for Todd Akin to seek a court
order to have his named removed from the ballot, if he chooses to quit the
campaign. But that seems unlikely.

(BEGIN VIDEO CLIP)

AKIN: The reason I`m in the race is because the people of Missouri
chose me to do a job. I take that very seriously. And we are going to be
totally focused on winning that seat from Claire McCaskill, because that`s
what I was told do by the Republican voters. And I plan to get that job
done.

(END VIDEO CLIP)

O`DONNELL: Joining me now, Karen Finney, former DNC communications
director and an MSNBC contributor. Karen, Claire McCaskill is going to be
with me tomorrow night, when she will know whether she is in it against
Todd Akin to the end or not. And I think that Newt Gingrich is right about
something, that the Republicans will come flooding back into that race, to
try to do anything to stop Claire McCaskill, including going back on their
word and supporting Todd Akin.

KAREN FINNEY, FORMER DNC COMMUNICATIONS DIRECTOR: Can we just,
though, Lawrence, take a minute that like -- so you are in this much
trouble, and the person -- the only person that you can get to come in to
help you plead your case is Newt Gingrich. The guy who, you know, Shelly
Adelson`s 10 million dollars couldn`t save. It just shows how bad off Todd
Akin is here.

Sure, I think it`s highly possible that the Republicans will -- they
will have some talking points prepared as to why they`re going to have to
go back on what they said and support Akin. They may do it less overtly
and more covertly. That`s what Crossroads GPS is for, after all, because
they don`t -- they know this seat is important to them in terms of the
balance of the Senate and because it`s important to Romney.

O`DONNELL: Let`s listen to how Newt Gingrich explained away saying
dumb things.

(BEGIN VIDEO CLIP)

GINGRICH: Let me say something. I have on occasion said pretty dumb
things in my career. My wife still occasionally looks at me and says,
lunar colony? And I get it. But if saying something dumb disqualified
you, Joe Biden couldn`t be vice president.

(LAUGHTER)

(END VIDEO CLIP)

O`DONNELL: So Newt is there saying, you know, I`ve occasionally said
dumb things and then he proceeds to say yet another dumb thing.

FINNEY: Yeah.

O`DONNELL: Would you characterize the legitimate rape comment as just
a dumb thing a politician said?

FINNEY: No. That -- I mean, come on. That was so offensive. I
mean, if that is not -- I have to tell you when he said that, I thought to
myself, that ought to be used as a slogan for why we need to reinstitute
sex education in our schools, because the guy is so misinformed. It wasn`t
just a dumb thing to say. It was an ignorant thing to say. And it was
disrespectful.

I mean, the idea -- pull that apart for a second. The idea that we`ve
got some kind of magical power as women to deal with that situation, it was
horrible. And that`s not the only thing that he said. He said a number of
things that if I were a voter in Missouri, I would be very concerned with
the idea that someone like that could sit in the building behind me and be
on like a Senate, I don`t know, Intelligence Committee or have any kind of
access to any kind of top secret information, when the man seriously thinks
that there is a distinction between forcible or legitimate rape, which --
even that distinction is offensive, and just being raped.

Not to mention that he has a totally misconstrued idea about how the
female body works.

O`DONNELL: And even with Todd Akin revealing himself to be as crazy
as he is, Claire McCaskill is still in a tough race in that state. The
Real Clear Politics poll average is basically a 5.3 percent lead by Claire
McCaskill. She`s got 48 percent to Akin`s 42.7 percent. And so that is
nowhere near something that Claire McCaskill can feel confident about in
that state, is it?

FINNEY: No, absolutely not. She definitely has a lot of work to do.
Certainly if you consider that it is likely that the Republicans will come
back in and start spending money pretty heavily in the state, she`s going
to have a tough race. Let`s not kid ourselves here.

As much as we like to poke fun at Todd Akin and just his ignorant
comments and sort of his misconstrued ideas, this is going to be a tough
race, no question. And I agree -- actually, I never thought I would hear
myself say this -- with Newt Gingrich on the other hand as well, that
you`re not probably going to see a lot of ticket splitters in the state.

So this is an important state for Romney. it`s an important state for
Obama. But Claire has definitely got a very tough race ahead of her.

O`DONNELL: Karen Finney gets THE LAST WORD on the Missouri Senate
race tonight. Thanks for joining me tonight, Karen.

FINNEY: Thanks, Lawrence.

O`DONNELL: But tomorrow night here on a LAST WORD exclusive, Missouri
Senator Claire McCaskill will be with us on that Missouri Senate race.
"THE ED SHOW" is up next.

END

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