updated 12/2/2013 11:08:00 AM ET 2013-12-02T16:08:00

THE LAST WORD WITH LAWRENCE O`DONNELL
November 26, 2013
Guest: Cecile Richards, Julian Epstein, Marcus Owens; Julian Epstein;
Hailey Malm; Erica Hudson


LAWRENCE O`DONNELL, MSNBC HOST: Remember when Mitt Romney said
corporations are people? Well, now the Supreme Court is going to decide if
corporations are religious people.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: Breaking news from the Supreme Court.

UNIDENTIFIED FEMALE: A very important question that`s headed to the
Supreme Court.

UNIDENTIFIED MALE: Does a corporation, does a company have religious
freedom?

UNIDENTIFIED MALE: At issue, a lawsuit from Hobby Lobby stores.

UNIDENTIFIED MALE: A lawsuit from Hobby Lobby stores.

UNIDENTIFIED MALE: Fighting the birth control requirement.

UNIDENTIFIED MALE: The health care law`s requirement.

UNIDENTIFIED FEMALE: That employers offer free birth control
coverage.

UNIDENTIFIED MALE: Arguing that the Affordable Care Act violates
religious liberties.

UNIDENTIFIED MALE: So, the question here is, is Hobby Lobby a person.

MITT ROMNEY (R), FORMER PRESIDENTIAL CANDIDATE: Corporations are
people, my friend.

UNIDENTIFIED MALE: That famous line by Mitt Romney.

ROMNEY: Corporations are people, my friend.

UNIDENTIFIED MALE: That`s essentially the question.

UNIDENTIFIED FEMALE: Can a for profit business deny birth control or
any other kind of coverage for that matter.

UNIDENTIFIED FEMALE: This was an issue that was debated all
throughout 2012.

UNIDENTIFIED MALE: Let`s talk about the birth control fight.

UNIDENTIFIED MALE: Bayer aspirin for contraceptives.

RUSH LIMBAUGH, RADIO HOST: It means you are a slut, right?

UNIDENTIFIED MALE: Gals put it between their knees and it wasn`t that
costly.

UNIDENTIFIED FEMALE: How far does this go?

UNIDENTIFIED FEMALE: This will set a dangerous precedent.

UNIDENTIFIED MALE: They would further personify corporations.

UNIDENTIFIED MALE: Slippery slope of corporate personhood.

ROMNEY: Corporations are people, my friend.

UNIDENTIFIED MALE: That`s essentially the question here.

UNIDENTIFIED MALE: The Supreme Court has never decided before.

UNIDENTIFIED FEMALE: It`s breaking news from the Supreme Court.

(END VIDEOTAPE)

O`DONNELL: The Supreme Court announced today that it will hear two
cases that challenge the Affordable Care Act`s contraception mandate on the
basis that it violates the company`s religious beliefs. That`s right, the
company`s religious beliefs.

The mandate requires companies with 50 or more workers to provide
health insurance policies with birth control coverage for women. In one
case, the tenth circuit ruled that the chain store Hobby Lobby did not have
to follow the mandate based on the Supreme Court`s Citizens United decision
arguing that a corporation`s First Amendment protections extend to
religious liberties.

But in the second case, the third circuit court ruled against a
cabinetry company owned by a Mennonite family deciding that religious
liberties do not apply to for-profit corporations. In a statement today,
the White House said, said, "As a general matter, our policy is designed to
ensure that health care decisions are made between a woman and her doctor.
The president believes that no one, including the government or for profit
corporations, should be able to dictate those decisions to women."

House Speaker John Boehner said, "The administration`s mandate is an
attack on religious freedom and I`m hopeful it will be reversed by the
court."

Joining me for an exclusive interview, Cecile Richards, president of
Planned Parenthood Action Fund, Irin Carmon, an MSNBC.com national
reporter, and Julian Epstein, Democratic strategist and former chief
Democratic counsel to the House Judiciary Committee.

Cecile Richards, what do you see at stake here in the cases going to
the Supreme Court?

CECILE RICHARDS, PLANNED PARENTHOOD ACTION FUND: Well, obviously,
what`s at stake is ability of women to access birth control from their --
for their insurance companies. And what is really I think perplexing for
women, the fact that one, that we`re still debating birth control. It is
the most commonly prescribed medicine in America, 99 percent of women use
it at some point in their lifetime.

And so, for women, this is not a religious issue. It is a health care
issue. And it is an economic issue.

For many women, the cost of birth control is a huge -- is a barrier.
And if you are making minimum wage at a craft store, $600 for birth control
is a serious issue.

O`DONNELL: Irin Carmon, the details of these cases as I understand it
-- the companies are not objecting to birth control pills or birth control
that is used prior to sexual intercourse. What they`re concerned about is
morning-after pills and any action taken after the fact.

IRIN CARMON, MSNBC.COM: There is a range of these cases. Within the
two the Supreme Court took. There are not any Catholic cases. But some of
the other 43 for-profit employers that have tried to claim that they have
liberty that is being violated object to all forms of birth control.

It`s also important to note this is a profoundly anti --

O`DONNELL: Irin, let`s hold it to cases in front of the Supreme
Court.

CARMON: Sure. You know, when the Supreme Court rules it will resolve
all the cases. But what`s at stake here is a profoundly unscientific view
of birth control. The idea is that birth control, they also actually
object to the IUD, which is taken -- which is put in before sexual
intercourse. They believe that anything that might potentially dislodge a
fertilized egg whether there`s any proof of that happening counts as
abortion.

So they would use the word abortifacient, but doctors would use the
word birth control. And it`s very important that, you know, that
progressives note when they say abortion, what they`re actually saying is
birth control.

O`DONNELL: Julian Epstein, what are the legal dimensions of this as
it approaches the court? What do you expect the case to turn on?

JULIAN EPSTEIN, DEMOCRATIC STRATEGIST: Well, there is two analysis,
essentially. The first question is whether a corporation has a free
exercise right, under the First Amendment. And, this is a little bit of a
messy case. And it is, I think very different from the Citizens United
case where the Supreme Court held that corporations have a free speech
right and recognized as individuals.

Here for that purpose -- here, you are talking about a corporation
having a free exercise of religious right, of religion right, which seems
to be a different animal. And furthermore, you are talking about the
court`s ability to restrict its employees from their own free exercise of
religion.

So, in the free speech case, for example, you could have a corporation
wanting to spend unlimited amounts of money because it doesn`t like a
particular regulation. Here, you are talking about a corporation having
some kind of inchoate religious view that it can impose on the rest of its
employees.

I think this case is going to have a tough time under the First
Amendment. If it goes down under the First Amendment, the plaintiffs could
make the case under an Religious Freedom Restoration Act, which is an act
passed in 1993, to give individuals a little bit more rights than were
enumerated in the Constitution when it comes to free exercise, they could
make the case.

But even there, it will be a difficult case for the Supreme Court to
argue for a whole host of reasons under the Religious Freedom Restoration
Act.

O`DONNELL: Let`s listen to what the president of Hobby Lobby said
about this.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: So, did you all -- did you all as a family get
together and pray on it and say, Lord this is our business, and we can lose
it? But we dedicate it to you. And we know where you would stand on this?
Is that how you did it?

STEVE GREEN, HOBBY LOBBY PRESIDENT: I would look to say there was a
lot of prayer. But there wasn`t. We did come together, my brother`s
house. And -- and we had -- my parents, me, my brother, sister, and all of
our kids were there. Everybody got to share.

And then when it was all over, basically said -- it was pretty much
unanimous. We know what we can do. It`s not like you need to pray about
it do you do what`s wrong. That was somewhat obvious.

And so, you naturally said, you know, we don`t know what we are going
to do. But we do know what we won`t do. We won`t take life.

(END VIDEO CLIP)

O`DONNELL: Cecile Richards, what`s your response to that?

RICHARDS: Well, it`s just incredible. Everyone is entitled to their
own religious views, certainly. But this law already has exemptions for
places of worship. The question here is really whether a corporation and,
and owner of a corporation, a for-profit corporation can impose their own
religious views on their employees.

This is a company that employs thousand across the country, who many
of whom, I am sure rely on birth, ironically, not only for preventing
unintended pregnancy. But many women rely on birth control pills for a
host of other medical reasons.

This is really would be ground-breaking for the Supreme Court to find
that a private, for profit, employer can make personal medical decisions
for women, rather than letting women make their own decisions with their
doctors.

O`DONNELL: Irin Carmon, what`s your reaction to the president of
Hobby Lobby saying that the stance they are taking is, these are his words,
we won`t take life?

CARMON: Again, as Cecile says, he is entitled to his beliefs. But in
terms of the science, it`s just not substantiated in fact. I mean,
emergency contraception prevents ovulation. It does not prevent
implantation. Implantation is not pregnancy. The morning-after pill is
not abortion.

But again the question is, should the Greens` religious beliefs be
imposed upon their employees. If you are a low-wage employee and you`re
thinking about your decisions about birth control -- this is the difference
between reproductive freedom and reproductive justice.

Women who are already living on not very much money are making
decisions about but their own economic future. And so, you know, the idea
that a corporation has religious liberty, but it`s the liberty dictated by
the boss I think is something that is profoundly radical.

O`DONNELL: Julia Epstein, there`s a 1990 case that Justice Scalia
commented on that seems as though it could be relevant here. It was a case
where the Supreme Court found that Oregon, in this case, could deny
unemployment benefits to people who were fired for consuming peyote as part
of a religious tradition, the drug being illegal in the state.

These are Scalia`s word from the opinion. Scalia wrote, "To permit
this would make professed doctrines of religious belief superior to the law
of the land and in effect to permit every citizen to become a law unto
himself."

It will be interesting, will it not, Julian to see, how Scalia manages
that past quote of his?

EPSTEIN: That`s right. And Scalia had interesting company in that
case. And there, the idea was that you can`t simply use a professed
religious belief to get, exempt yourself from laws.

So I think -- conservatives will find themselves in an interesting
position. As you noted, in 1993, Congress passed a law known as the
Religious Freedom Restoration Act. And the question now is, not only --
the question is not only whether any of these provisions, protections apply
to a corporation to begin with, but whether the statute that was passed, in
1993, would apply to a corporation.

I think the answer to that is probably going to be no, because -- for
a variety of reasons. One is Congress certainly wasn`t passing a law in
1993, expecting that there would be any religious free exercise right on
the part of a corporation. That`s clear in the legislative history.

Secondly, the law in 1997 was severely limited only to apply to
federal laws and not state laws. In this case, I think there`s a pretty
strong argument that the Affordable Care Act, superseded the 1993 statute.

Third, if you think of how absurd this is. If we were to have a
federal statute that said anytime somebody wants to state that they have a
religious belief, a reason not to comply with the law, affordable care act
or something else, you would have just enormous amount of abuse in the
country. You can have companies, coming up, and individuals coming up with
all kinds of pretextual reasons saying I don`t want to comply with this or
that law, because I have some religious belief.

So, it`s hard for me to imagine that any one will interpret end of the
day this Congress passed statute in 1993, in such a way as to say that
companies don`t have to -- provide health insurance. I just think it will
be a stretch end of the day.

O`DONNELL: Cecile Richards, if Justice Scalia remains consistent, it
may be that the Supreme Court solidifies this territory in a way that`s
very, very helpful to the Affordable Care Act.

RICHARDS: And I think they should. Look, the Affordable Care Act,
really leveled the playing field for women in so many ways. Not just in
the birth control benefit and a preventive care benefit, which all women
now or under insurance plans. Insurance companies can`t charge women more.
No more gender rating with insurance plans for no co-pay.

But, finally, insurance companies can`t charge women more. There`s no
more gender rating, you know, with insurance plan.

For the first time, women can`t be denied, health insurance coverage
because they have pre-existing conditions.

So, the birth control benefit is part of a much bigger package. This
is finally getting equity in health care coverage for women. It`s a long
time coming, long time overdue.

And, frankly, women and men in this country support this benefit, and
I really hope that the Supreme Court will find that as well.

O`DONNELL: Thank you, Cecile Richards, Irin Carmon, and Julian
Epstein.

CARMON: Thanks.

RICHARDS: Thanks, Lawrence.

O`DONNELL: You can read Erin Carmon`s reporting on this on our Web
page, thelastword.MSNBC.com.

In a major victory for governing sanity, the Obama administration is
beginning to follow the advice of this program and rewrite the IRS rule on
501c4 organizations so that they will no longer be abused as vehicles for
political campaigning.

And, in the rewrite tonight, a Christian school has threatened to
expel this 12-year-old girl because the school authorities don`t like her
hair style. Now, when you look at a picture of Jesus Christ`s hair, the
answer to the question what would Jesus do seems kind of obvious.

And later, France, France, has picked a fight with my neighborhood.
That`s right, the French government has decided to specifically attack
Dorchester in writing. You have me and Mark Wahlberg to deal with, France.
Dorchester will be defended tonight by me and a couple of my Dorchester
buddies.

(COMMERCIAL BREAK)

O`DONNELL: A new poll out tonight shows Americans support the six-
month deal struck between the United States and five other countries with
Iran that monitors Iran`s nuclear program. By a 2-1 margin, according to
"Reuters", 44 percent support the interim deal, and 22 percent oppose it.
If the Iran deal fails, 49 percent want the United States to increase
sanctions, while 31 percent want the U.S. to pursue further diplomacy, and
only 20 percent want the U.S. military to use force against Iran.

The poll did not ask those brave 20 percent, the Iraq warmongers, who
among them would be willing to volunteer to fight in that war that they
themselves so support.

Up next, Ezra Klein with the latest on the Affordable Care Act.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We`re going to continue
to make progress on all those fronts and yes, continue to implement the
health care law. The product is good, people want it, and we should not
live in a country where people are going bankrupt just because they get
sick.

And anybody who is going to keep on pushing against that, they will
meet my resistance, because I am willing to fix any problems that there
are. But I`m not going to abandon people to make sure that they`ve got
health insurance in this country. That is not something we`re going to do.

(END VIDEO CLIP

O`DONNELL: Joining me now, MSNBC policy analyst and "Washington Post"
columnist, Ezra Klein.

Ezra, the president was out here in Los Angeles today, speaking in
very positive tones about the Affordable Care Act which is easier to do
here in California, where they have more success to report.

EZRA KLEIN, MSNBC POLICY ANALYST: I think that`s right. I mean,
California has been one of the real bright spots in the nation, and a
bright spot for the law. California is 38 million folks. It`s about one
in eight American.

If you can make it work there in a state with that many people, that
many uninsured, a very diverse population, it shows that the underlying law
can be made to work pretty much anywhere, as long as you make the digital
architecture, sort of serves as the foundation for the entire thing,
functional for people who want to sign up.

O`DONNELL: The -- let`s listen to what Kathleen Sebelius said today
about that digital architecture.

(BEGIN AUDIO CLIP)

KATHLEEN SEBELIUS, HHS SECRETARY: We are definitely on track to have
a significantly different user experience by the end of this month. That
was our commitment and people experience on October 1st. So, we`ve added
hardware. We`ve added software. We are continuing to work on the parts of
the Web site that were too confusing to people.

And well beyond December 1st, those improvements will continue. I
would urge you and your folks on the ground to not hesitate to recommend
that people go to Healthcare.gov and get signed up because that experience
is currently working much better and it will continue to work much better.

(END VIDEO CLIP)

O`DONNELL: Ezra, that is the key, isn`t it, to the public perception
of what`s going on here? It`s just how well the Web site works.

KLEIN: Not only is that the key. What she said there, the fact that
she said that is extremely important.

So, I have been tough on Affordable Care Act. I think it`s been quite
broken since the beginning. I think that the digital architecture was
systematically flawed when it emerged. I think it just fundamentally
wasn`t working.

And, folks eventually, the Obama administration knew that. They
stopped. This was a really important change in the rhetoric, they put
their communications plan on hold, their whole big outreach effort.

And they did not recommend people go. They were very careful for
quite some time. They were not freeing to get people to go to the Web
site, because if they did they would get frustrate and they might not come
back.

Kathleen Sebelius was saying that in a call to statewide, and local
officials, is evidence. And I think it`s correct that the Obama
administration believes the Web site really has improved. That at this
point, if they can drum up interest for people to go and try to sign up for
health care insurance, that the Web site is in good enough shape that for
the most part, in the majority of cases, they can actually turn that
interest into real enrollment, that will go through and get correct
eligibility determination.

And then after they get that determination, they`ll buy insurance, and
the insurer will get the correct information about person who just signed
up. I think, right now, there a lot of reasons to believe the Web site is
actually improving at a reasonably rapid clip. I think it might have been
sort of turned a significant corner over the last week, week and a half,
with some of the fixes that have been made. And I think what you`re seeing
here is that the Obama administration is confident that that is actually
the case.

O`DONNELL: The -- the president today talked about his own, his
perception like yours, that the rollout was a serious problem. And he does
acknowledge that before he shifts into trying to tell the positive story of
what`s happening out there. And that seems to me to be a basic credibility
point, Ezra. It seems impossible for the president to go out there talking
about this now, without acknowledging the struggle that they`ve been
through.

KLEIN: I think that`s right and I think that on a more sort of
managerial level, President Obama sees himself, he said this publicly, as
the CEO of the federal government, the CEO of what he calls the largest
corporation on Earth some times.

And he was angry. I mean, he did not know. He was not informed by
his staff. Many staff didn`t know the rollout was going to be what it was
going to be.

And so, he went out and promised to people that this was going to
work, that he`s going to sort of fulfill their expectations. And he was
personally I think very frustrated when it didn`t function. He felt that
he had betrayed people who supported him. He felt he betrayed the people
he made promises to.

And so, when you set this out, I mean, part of that taking
responsibility is also I think an actual, sort of a human feeling on his
part that this did not go well and he simply has to own up to that, because
ultimately he is responsible and what you`re seeing on the other side of
that is a fair amount of anger and frustration in the White House how to
not just fix the Web site, but make sure in the future, by reforming things
like the way the government does IT procurement, that this doesn`t happen
again.

But, yes, I mean, they needed to take responsibility and be upfront
about the fact that the Web site did not work, that the rollout with this
law was very, very bad. But at some point, too, you know, they need to
tell the story. I think they`re getting to a point where they can begin to
do so, that they fix some of the most severe problems. And that
ultimately, the law is going to be functional, is going to be smooth
enrollment process, and as you`re seeing in places like California, it`s
going to work.

O`DONNELL: Ezra Klein, thank you very much for joining me tonight.

KLEIN: Thank you.

O`DONNELL: Remember that whole, exclusively versus primarily thing,
that the law on 501c4s about how they have to be exclusively for the
promotion of social welfare in the law, but in the regulation, the IRS, 50
years ago, changed that to primarily. Now, the IRS is now finally on the
case.

The Treasury Department has been taking notes apparently during this
program. And they are going to work to fix that. They`re going to issue a
new regulation on it. That`s next.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

O`DONNELL: If you have been anywhere near a news source today, you
know that tonight, the Internal Revenue Service is officially out of
control, and that all of Washington is scandalized by the out of control
IRS.

REP. DARRELL ISSA (R), CALIFORNIA: This was the targeting of the
president`s political enemies effectively, and lies about it during the
election year.

O`DONNELL: For 54 years, the IRS has gotten way with the crime of
changing the word exclusively to primarily.

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: My question is who is
going to jail over the scandal.

O`DONNELL: That change from exclusively to primarily allowed
political organizations to buy political advertising.

UNIDENTIFIED MALE: As Mr. Lawrence O`Donnell, as the CREW group,
Citizens for Responsibility and Ethics in Washington has pointed out in a
petition, you are to be denied this status if you are not exclusively
engaged in social welfare.

O`DONNELL: Tea Party organizations are not operated exclusively for
the promotion of social welfare.

SEN. HARRY REID (R-NV), MAJORITY LEADER: What has Karl Rove ever done
to improve the social welfare of the United States?

O`DONNELL: Tea Party organizations are primarily and many of them
exclusively for the promotion of Republican political candidates.

UNIDENTIFIED MALE: Clearly, a Mack truck is being driven through
501c4 loophole.

O`DONNELL: The real scandal is what the IRS did in 1959 when it
changed the meaning of the English language.

UNIDENTIFIED FEMALE: Do you know why Treasury changed it from
exclusive to primary?

UNIDENTIFIED MALE: I do not.

UNIDENTIFIED FEMALE: You do not.

O`DONNELL: The IRS decided tax-exempt status could be granted even if
an organization was not exclusively for the promotion of social welfare,
but simply primarily for the promotion of social welfare.

UNIDENTIFIED MALE: What we are asking the court to do is to instruct
the IRS to apply the law as it was written.

UNIDENTIFIED MALE: The ambiguity that`s created between the law
saying exclusive and the regulation saying primary is a problem.

O`DONNELL: That is truly scandalous.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We are going to have to
make sure the laws are clear.

(END VIDEO CLIP)

O`DONNELL: Today, on day 197 of the fake IRS scandal, the treasury
department announced that it will clarify the regulation of political
activity of tax-exempt social welfare organizations.

Joining me is Marcus Owens, the former head of the IRS exempt
organizations division. And back with us Julian Epstein, the former
minority staff director of the House government.

Julian, were you majority or minority when you were there?

JULIAN EPSTEINI, FORMER MINORITY STAFF DIRECTOR, HOUSE GOVERNMENT:
was majority of the government oversight and minority chief counsel at
House judiciary.

And I was a minority in the other committee.

O`DONNELL: Let`s get to this. The treasury indicated today that the
new regulation, they will propose would amend the current regulation by
indication that the promotion of social welfare does not include candidate
related political activity.

Marcus, that`s where they`re beginning. But they`re inviting comment
from all interested parties. Tell us how this process will work.

MARCUS OWENS, FORMER HEAD OF THE IRS EXEMPT ORGANIZATIONS DIVISION:
Well, the treasury department will received comments and it is important to
understand this is a treasury department speaking too in conjunction with
the IRS. They will get comments from the variety of groups. The changes
are pretty sweeping in a number of ways that are not immediately obvious.
For example, they conclude that a voter`s guide, even a nonpartisan voter`s
guide is political campaign activity. And you know, the league of women`s
voters, distributes, a lot of voters guide right before an elections. So,
their impact and perhaps were unintended or at least not clearly thought
through.

So, I think there will be a lot of comment. The treasury department
will sift through the comments. They have to be submitted by the end
January. There may be a public hearing, I suspect there probably will be.
And then if the normal regulations process is allowed to work, probably,
final regulations will emerge in a couple years.

O`DONNELL: Julian Epstein, nothing is set in stone here. But what
the treasury put out today clearly indicates that they want to move toward
clarity and they want to try to get certainly what they call candidate
related political activity out of 501c4s.

EPSTEIN: Well, somewhat out of it. And I think and they should put a
footnote in the rules giving credit to this program. Because I think this
program has had an enormous impact on capitol hill in terms of
crystallizing this issue.

But I think first, it is a very significant move. It is significant
because it clarifies what has been lacking in clarity for the last 50 years
as you pointed out. The so-called scandal of the tea party being targeted
was never a scandal. What had happened was groups on the left and right
were both targeted. And they were target under shifting criteria about who
qualifies for the tax status and who doesn`t qualify for the tax status.

And what the rules are trying to do here, what the rule change is
trying to do here, is to clarify for the first time, what is considered to
be political activity and what isn`t. So, for example, the game that was
played by a lot of groups, they got this status is they run an ad up to a
campaign. Say Lawrence O`Donnell is running for Congress and they say
isn`t Lawrence O`Donnell
a wonderful guy (INAUDIBLE). And he passed this important law. And they
claim that kind of thing is not a political ad because it is not saying,
vote for Lawrence O`Donnell. And that is a game. It is a charade.

So, what the rules are doing now is define, for the first time, what
is political activity and what isn`t. The problem is, as you pointed out,
Lawrence, as important as these changes are, the rules still allow for
somebody getting this special tax status to spend 49 percent of their time
on what is political activity.

So I can still run that ad, saying, Lawrence O`Donnell is a great guy
if he is running for Congress. That kind of activity, just cannot
constitute 51 percent of my time. So, it is major change, but it is not
going as far as you have said we need to go, far, as which is to comply
with the letter of the statute. And so, but that`s it. I think it is a
major improvement.

O`DONNELL: Well, it is open for comment. And I will of course be
commenting for the next several weeks.

EPSTEIN: No doubt.

O`DONNELL: That we should simply be enforcing the law as written
which says exclusively.

Marcus Owens, that issue that Julian was talking about which is the
interpretation not by the IRS, or by the government, but simply by, what we
call the practitioner community. The accounts out there advising people
over the years. That, the practice became, the public practice became, we
believe that primarily means 51 percent of your activity and 49 percent of
your activity can be political.

One of the thing the treasury says they actually want to find a way of
quantifying is that. They, they want to issue their own ruling for the
first time on exactly how much of political activity is acceptable.

OWENS: Well, that is certainly what they say is the next item up in
the way of guidance. It is not addressed in these particular regulations.
But they do ask for comments on future guidance. And that`s one of the
items.

O`DONNELL: And, Julian, there is that second stage which would deal
with what you`re talking about. But in the meantime, Julian, what do you
expect the political reaction to this situation will be? And will we have
the Karl Rove, 501c4s, will Karl Rove in that world all start screaming
about this and saying, this is unfair. You are trying to shut us down.
And if they do, what they`re arguing against is enforcement of the actual
law as written.

EPSTEIN: I think that`s absolutely correct. And at the same way that
this tape party targeting scandal was a phony scandal as revealed on the
show. It was actually initiated by a Republican staffer in the Cincinnati
office. And there was never any Obama administration involvement what so
ever. I think you will hear this kind of same dishonest characterization
of the motivation to make this change.

There are two things to keep in mind there. The first thing is that
all of the groups like the Karl Rove groups who are complaining that this
is some effort to suppress their political activity. All right, of these
groups, all they need to do is file for the same tax status under the 527
provision. The super PAC tax provision.

What -- the tax status that we are talking about, the 501c4 gives
organizations like Karl Roves, is the cloak of secrecy. They like dark
money. They want big contributors to give the millions of dollars and to
have those contributors never, never identified.

So, I think you will hear the claim that this is an effort to suppress
political speech by conservatives. The law -- the rules will obviously be
equally applied to whatever part of this political spectrum you are in.
but most importantly, the reason that Karl Rove and others want to be able
to take advantage of this law is because they want to hide their donors.
And that`s ultimately what this is about.

So, this doesn`t change any political activity. It doesn`t affect
political expression because there is other tax status options for all of
the organizations on the left and right. What it means is organizations
like Karl Rove`s and others won`t be able to keep the donor secret.

O`DONNELL: Marcus Owens and Julian Epstein, thank you both for
joining me tonight.

EPSTEIN: Thank you.

OWENS: You are welcome. Thank you.

O`DONNELL: Coming up in the a rewrite, a Christian school threatens
to expel this 12-year-old honor student because they thought her hair was a
distraction. Other kids in the school have been teasing that girl about
her hair. And so, the school solution was not to try to stop the teasing,
but to change her hair. And tonight, after we sought comment from the
school today, the school is wisely backing down.

(COMMERCIAL BREAK)

O`DONNELL: President Obama toured dream works studios here in Los
Angeles today. And not surprisingly, he began to dream.

(BEGIN VIDEO CLIP)

OBAMA: I would like to work here. I have asked Jeffrey -- the only
concern that I had was -- the lights were kind of dim in the offices. And
I am pretty sure I would fall asleep. But there is a natural connection
between me and DreamWorks. I don`t know if you know this but, my ears were
one of the inspirations for Shrek.

(LAUGHTER)

(END VIDEO CLIP)

O`DONNELL: The rewrite is next.

(COMMERCIAL BREAK)

O`DONNELL: In tonight`s rewrite, hair, Christian hair. More
specifically, what would Jesus Christ think of this girl`s hair?

Her name is Vanessa Vandyke. She is 12-years-old and she is holding
her certificate of membership to the national junior honor society.
Vanessa is a student at Faith Christian Academy in Orlando, Florida. And
she is in trouble tonight with school authorities because of her hair.

According to an interview, Vanessa and her mother, Sabrina Kent, gave
to WKMGTV, the school wants Vanessa to cut or straighten or shape her hair
or be expelled.

(BEGIN VIDEO CLIP)

VANESSA VANDYKE, 12-YEARS-OLD: First of all, it`s puffy. And I like
it that way. And I know people will tease me about it because it is not
straight or anything and I don`t fit in.

(END VIDEO CLIP)

O`DONNELL: WKMG`s story went viral today and the school is now on the
defensive. The school gave a statement to the local TV station tonight
saying we are not asking her to put product in her hair or to cut her hair.
We are asking her to style her within the guidelines according to the
school handbook. That handbook says, quote, "hair must be a natural color
and must not be a distraction." Here is Vanessa`s mother`s reaction to
that rule.

(BEGIN VIDEO CLIP)

SABRINA KENT, VANESSA`S MOTHER: A destruction to one person is not a
destruction to another. You can have a kid come in with pimples on his
face, you know. Are you going to call that a distraction?

(END VIDEO CLIP)

O`DONNELL: The school refused to respond to an of our inquiries
today. But According to WKMG, the only hair styles actually prohibited by
the school handbook are Mohawks, shaved signs, rattails, et cetera. That`s
from the handbook.

Now, this is the perfect time for me to show you the, the exactly one
photograph in existence of my Mohawk taken when I was a senior in high
school. But this isn`t about me. This is about a certifiably very smart
12-year-old girl and her beautiful hair.

With pressure mounting on the school, they announce tonight, that
Vanessa will not be expelled for her hair. So congratulations to Faith
Christian Academy for rewriting their threat to expel Vanessa.

Christian school hair enforcers everywhere should all read what the
Miami New Times had to say about this. No official word on how God feels
about this Christian school threatening to kick Vandyke out over her hair,
but sources confirm that God did indeed give Vandyke her curly hair in the
first place. Sources further state that Jesus himself wasn`t much of a fan
of haircuts.

(COMMERCIAL BREAK)

O`DONNELL: Court documents released in the domestic abuse case of
George Zimmerman, show that police found five guns and more than 100 round
of ammunition in the home Zimmerman shared with his girlfriend. Police say
they found a 12 gauge shotgun, an AR 15 assault rifle, and three handguns.

Before he was arrested on November 18th, on charges of assaulting his
girlfriend, Zimmerman could legally own those guns. But the terms of his
bail now prohibit gun possession.

Up next, France, I know you have no reason to be afraid of me. No one
does. We know that. But Mark Walberg, France, do you really want to fool
with Mark Walberg. Think about that.

I will be right back and tell you why you shouldn`t fool with Mark
Walberg.

(COMMERCIAL BREAK)

O`DONNELL: Last week the French foreign ministry published advice for
French citizens, traveling to the United States. It included such
invaluable tourist information, on all coasts, sea bathing can be
dangerous, strong currents, sharks, giant sting rays. If you see a shark,
the best attitude is to keep calm and move away slowly.

But, the very first item in the eight pages of advice to French
tourists is to stay away from my neighborhood. My old neighborhood, which
is also happens to be Mark Walberg`s old neighborhood. The place where I
grew up in Boston. The very first warning to French tourist is to stay
away from Dorchester.

Right there at the bottom of page one, it says foot traffic and at
night should be avoided in the neighborhood of Dorchester, and Rocksburg
(ph).

Now, that bothered some of the kids growing up in Dorchester right now
when they read about it in the "Boston Globe" last week. And so, some of
the students and the French teacher at Codman Academy Charter public school
in Dorchester wrote a letter to the French counsel in Boston and they hand
delivered it this morning.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: I am writing to you about use of our school as
soon as possible in order to (INAUDIBLE), mis-reputation made by the French
foreign ministry about the neighborhood (INAUDIBLE) and that obtain where I
was a student there. Specifically, we are asking that after your visit you
will request that French foreign ministry apologize and retract its
disparaging characterization of our community.

(END VIDEO CLIP)

O`DONNELL: Joining me now is Codman Academy senior Erica Hudson, that
was her reading that letter in that video you just saw. And Codman Academy
French teacher, Hailey Malm.

Now, in the interest of full disclosure, Hailey, as you know, I am not
just from Dorchester. I`m also on the board of Codman Academy. It is one
of the great schools in Boston. And I love the work you are doing there.

And tell me what was like when you and the student in your French
class read in the Boston Globe that the French government had, though, the
first warning they had for French tourists is, stay away from Dorchester?

HAILEY MALM, FRENCH TEACHER, CODMAN ACADEMY: You know, it was really
frustrating. And when I first read the editorial in the Globe, I was very
angry. Unfortunately it was a Friday, and I wasn`t going to be able to see
the students until Monday.

But on Saturday morning, I woke up really early and wrote a letter to
the consul inviting him to come and see us and visit and see that there is
nothing to be afraid off. The reality is that many of -- almost all of our
students are from Dorchester (INAUDIBLE), and these communities are places
where people live just like anywhere else.

And so, on Monday when I showed the editorial to students, they were
very hurt and very frustrated. I find this betrayal. And so, we were more
than happy to invite the counsel to come and meet us. The students wrote a
letter to their French buddies who came and visited, visited us, in
Dorchester last year. And we`re really trying how to put as much pressure
as we can, on the French government to take down these warnings. And also
to realize that what we have been trying to do is build connections through
hosting students in Boston, in Dorchester through going to France. And
also visiting, neighborhood that are similar to Dorchester in France. So
that the tourist experience is actually connected to the real life
experiences of people in places as opposed to just the landmarks.

O`DONNELL: Erica you, live in Dorchester. You go to school in
Dorchester. If the French counsel were to come out in his limousine to
Dorchester, what would you want to show him?

ERICA HUDSON, SENIOR STUDENT, CODMAN ACADEMY: I would want to show
him everywhere if I could. It is still diverse here, but I would want to
show him, of course, my school because it is not in Dorchester, it is in
Codman square. And it such a good school. The staff, the students are
nice. We have a lot to offer. Other places would be like Hailey house.
It is bakery. I`m pretty sure French people love the bread and all that
stuff, Franklin park is in Dorchester. So, there is a lot of places that
they could go to. And is not -- Dorchester (INAUDIBLE) is not as bad as
they portray it.

O`DONNELL: And the JFK library is in Dorchester.

And Hailey, your French class is in the second church in Dorchester,
100-year-old, how old is the church? When was it built?

MALM: I am not sure of when this church was built. But I think that
I may know where you are going with this.

O`DONNELL: Well, John Adams was a frequenter of the church. So, it`s
been around for a while.

MALM: Yes, it is really exciting for us to have the historical sites.
I`m sorry.

O`DONNELL: And I think we have pictures of the Codman academy
students who actually traveled to France. And when you want to France with
them, you brought them into the kinds of neighborhoods that it sound like -
- the French ministry would have advised people not to visit in France.

MALM: Yes, absolutely. As part of the trip, we spoke about this
before. This was two years ago when we did our first trip to France, where
we talked about the fact that when many tourists visit Boston. They don`t
always come to Dorchester. And I asked students how that made them feel.
And it was really a moment sort of moment where students realized that
sometimes people are not going to come to Dorchester and so we made a point
of going to places that were similar to Dorchester when we visited France,
both in Paris and another cites.

O`DONNELL: Erica, how do you feel when you were reading that letter
at the consulate today?

HUDSON: At first, I was nervous. But I felt like I had power and I
felt like a leader because I was setting example for plenty of other
students that feel this way also.

O`DONNELL: Erica, you made Dorchester very proud.

Erica Hudson and Hailey Malm get tonight`s last word. Thank you very
much.

MALM: Thank you, Lawrence.

HUDSON: Thank you.

O`DONNELL: Chris Hayes is up next.

END

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