updated 1/6/2014 12:01:36 PM ET 2014-01-06T17:01:36

THE LAST WORD WITH LAWRENCE O`DONNELL
December 18, 2013

Guests: Nia-Malika Henderson, Peter Swire, Julian Epstein, Hunter Walker; Stuart Milk

LAWRENCE O`DONNELL, MSNBC HOST: Congress has shaken up Washington by
passing a budget. And President Obama is shaking up the White House.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Congress is finally tired of running on empty.

UNIDENTIFIED MALE: The Senate set for a final vote.

UNIDENTIFIED MALE: Meanwhile, the White House --

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: Congress worked. That`s
good.

UNIDENTIFIED MALE: They`re happy something is just getting done.

UNIDENTIFIED FEMALE: President Obama is shake things up at the White
House.

UNIDENTIFIED FEMALE: The return of John Podesta.

UNIDENTIFIED MALE: He is going to be a great asset to them.

UNIDENTIFIED FEMALE: Taking over the job of White House counselor.

UNIDENTIFIED MALE: Setting up a more progressive agenda.

UNIDENTIFIED FEMALE: We can run on populism. We can run on income
inequality.

UNIDENTIFIED FEMALE: Some times he can have a short fuse.

CARNEY: You began to say, does he owe an apology? He issued one very
quickly.

UNIDENTIFIED FEMALE: They have a nickname for the angry Podesta.

Skippy.

UNIDENTIFIED MALE: It`s the policies that are going to matter.

UNIDENTIFIED FEMALE: An unapologetically progressive agenda.

UNIDENTIFIED FEMALE: The stakes couldn`t be higher.

STEPHEN COLBERT, COMEDIAN: Unfortunately, folks, news happened.

UNIDENTIFIED FEMALE: The White House is releasing an independent task
force report.

CARNEY: We will have a readout of that meeting later today.

UNIDENTIFIED FEMALE: It comes with 46 recommendations.

UNIDENTIFIED FEMALE: On how the NSA collects intelligence data.

COLBERT: I`ve invented a powerful, new, anti-surveillance security
system.

CONAN O`BRIEN, COMEDIAN: Prevent the NSA from spying on you by
blocking your laptop`s camera.

COLBERT: Here is the prototype. OK?

O`BRIEN: This new high tech device is called a small piece of tape.

(END VIDEOTAPE)

O`DONNELL: Today, the United States Senate did something that we
thought maybe it had forgotten how to do. It passed a two-year budget
deal. It was a bipartisan budget agreement created the old-fashioned way
by the leaders of the Senate and House Budget Committees.

The new budget will replace some of the sequester cuts and probably
avoid another government shutdown. And according to "Politico" magazine,
today, President Obama hired former Clinton chief of staff, John Podesta,
as counselor to the president, to shake things up inside the White House.

"In effect, I was told, it represents the clearest sign to date of the
administration`s interest in shifting the paradigm of Obama`s presidency
through the forceful, unapologetic and occasionally provocative application
of White House power. Podesta whose official mandate includes enforcement
of numerous executive orders on emissions, on the environment, suggested as
much when he spoke with me earlier this fall about Obama`s team. They need
to focus on executive action given that they are facing a second term
against a cult worthy of Jonestown in charge of one of the houses of
Congress, he told me."

Podesta gave the quote to "Politico". Before he was hired by the
White House today, John Podesta tweeted, "In an old in the interview, my
snark got in front of my judgment. I apologize to Speaker Boehner whom I
have always respected."

Joining me now is Nia-Malika Henderson of "The Washington Post," and
Sam Stein, unsuccessfully trying to muffle his chuckles.

NIA-MALIKA HENDERSON, THE WASHINGTON POST: Jonestown.

O`DONNELL: So, Nia, the apology tweet is the way you begin your new
tour of duty at the White House.

HENDERSON: That`s right. Take to the Twitter.

O`DONNELL: Begin with an apology tweet.

HENDERSON: And apparently this, it wasn`t, this comment, it was in
October. It wasn`t like a year ago or two years ago. Not the best way tie
to start the fresh time in the White House. He starts in January.

You have seen from this White House and I think from Washington in
general, of this belief in wise men and fixers, right, who can come in and
shake things up and change everything. We have seen this White House do
this a couple times, with Rouse, Daley, and sort of reorganizations that
went on after 2010.

But it`s hard to know how effective this will be with the big things
that Obama has to do, and has to see happen in 2014. Namely, really making
health care work effectively for folks, I mean, that botched rollout. We
have seen the poll numbers plummet. Immigration reform, the budget fights
that Sam has written about, and how this deal looks pretty good, you know,
sort of on the surface, but if you look behind the details of it and the
fights that are going to come in the House -- not so good.

SAM STEIN, HUFFINGTON POST: Yes.

O`DONNELL: Sam, is this just a normal staffing cycle, people leave,
people come in? Or is this -- what everyone in Washington wants to say it
is, which is some kind of White House in trouble, second term, and, you
know, as Nia was talking about, you know, we need some kind of rescuer?

STEIN: Well, it`s both, right? John Podesta was transition chief for
this White House. So, he was there at the beginning. He`s obviously a
well-known operative within Democratic circles. He was a former chief of
staff. So, it`s not like it is some one outside of Washington coming into
rescue the administration.

At the same time, however, this administration is pretty insular.
They don`t have a lot of new faces all the time. And clearly they felt
they needed a breath of fresh air. So, they brought some one new in.

But, you know, Nia hit it on the head, which is that -- how
significant a move this is depends on how much you`ve think that the
institutional structures of politics are responsible for the gridlock. I
don`t personally think that House Republicans are going to take their foot
off the gas when it comes to health care, just because the John Podesta was
hired. I really just don`t think that, you know, they`re going to reverse
course because of this month-old Jonestown quote. So, you know, I think
there are real institutional hurdles to getting things done. I think
having new people in there helps, because there are people who are tired
inside the White House.

But in the end, the same problems are going to be there with or
without Podesta.

O`DONNELL: I was struck by the quote, because people like John
Podesta, a lot of them in Washington, go in and out.

HENDERSON: Yes.

O`DONNELL: And I would think, where John Podesta was sitting, he had
every right to assume at some point, whether in this administration or the
next, he was going to be back in, maybe at some point in a position where
he`d have to be confirmed?

HENDERSON: Yes.

STEIN: Yes.

O`DONNELL: There are things you just don`t say. There are phrases
you just don`t do. I mean, I think I have proven it, that I have no
expectations of going back in.

(CROSSTALK)

O`DONNELL: So --

HENDERSON: This White House has apparently, you know, approached him
several times. About, you know, coming back in and he kept refusing. But
this time, he agreed to do it. And has only agreed to do it for a year.

But this quote, it`s --

STEIN: The weird part about this --

O`DONNELL: It`s very controlled.

HENDERSON: He is.

(CROSSTALK)

STEIN: I talked to him around the time after one of the shows that
we`re doing and he was talking how Obama needed to bring Boehner in to have
conversations. He wasn`t talking Boehner as a sadist, weird figure that he
was going to talk, a leader of a cult, he was talking about the need to
restart a dialogue after the government shutdown. So there is a little bit
of --

O`DONNELL: He worked in the White House. He had to do business with
Republicans in both bodies, Senate and the House. It`s not alien to him at
all.

HENDERSON: That`s right. I mean, he had to deal with Newt Gingrich,
was able to steer Clinton effectively through the whole impeachment, Monica
Lewinsky scandal. So, you would think that he should know better, but just
in this sort of day and age --

STEIN: Maybe he didn`t know that time --

(CROSSTALK)

O`DONNELL: Right.

STEIN: So sudden.

O`DONNELL: The big news of the week was that we are become to
business as usual in the capital.

STEIN: Smell it? Smells good, right?

O`DONNELL: Which is to say passing little budget things that move the
government forward in small ways. So, of course, business as usual is
being criticized for being business as usual.

But, Nia, what does it mean, the Republicans are already saying, look,
the next place we might be able to have a real good fight is the debt
ceiling.

HENDERSON: Yes, I mean, that`s the thing. They basically have four
weeks to hash out, this budget deal -- I mean, sort of kick the can down
the road a little bit. Now, these 12 committees in the House, are going to
hash all this stuff out.

All of these conversations going on in Washington, now, Republicans
gloating, right? About not extending, unemployment benefits.

So, I don`t think, you know, people are sort of patting themselves on
the back for the deal. I`m not sure that is --

STEIN: Well, the debt ceiling thing is interesting. There was a
point after the government shutdown, when Mitch McConnell said, we`re not
going to do that again. You don`t quick it, whatever the quote was. You
got a sense that they have to keep throwing out this next fight in order to
placate the Tea Party members of the caucus who, you know, some of them
held their nose and voted for this thing. But others were really upset.

And so consistently, Republican leadership in both chambers of
Congress keep saying, the next fight, where we really get them. The next
fight where we can really get Obamacare, repealed from the books. So there
is always this promise and there`s always this kicking of the can.

But I`m more interested in the fights that are to come. I think the
appropriations process is going to be fascinating, because for the first
time of in a long time. You are going to be spending more money, and
there`s a lot of different agencies, a lot of government accounts that are
dying for an infusion of cash that had been cut by sequestration.

But we -- the government is not relieving full sequestration. So,
it`s a small pond, a lot of fish having to live with it. So, it`s going to
be fascinating to see of what the lobbying campaign is like.

O`DONNELL: That is in the budget process, the second component of
what they have do after what they have done, which is a basic outline.
Now, you get into individual committees saying this is how much we will
raise.

STEIN: They all have different priorities up there. They all feel
like their own pet projects and agencies were cut harsh by sequestration.
They like to relieve some of that and put some money back into the coffers.

So, you`re going to have for the next three or four weeks, an
incredibly difficult, delicate process in which you have to go line by line
through the government expenditures and say, OK, this needs to be up. This
needs to be done. This many weapon system needs to be purchase, this many
don`t.

And it`s going to be very tense. And there`s going to be a lot of
intensity in the negotiations and it could actually not happen.

HENDERSON: And this, right within the context of Boehner trying to --
sort of remake his leadership, and also, of course, 2014.

O`DONNELL: And, Sam, to go back to Podesta`s jurisdiction, we are
being told about, which is, hey, look at all the executive orders. What we
can do without Congress. What is there? They always like to talk about
that. It`s not an area that I understand.

STEIN: It`s difficult to understand because there is such a legal,
political dynamic. So, for instance, with gun control earlier this year,
they did 23 or so executives actions. Minor stuff about sharing
information about different government agencies. That time of thing.

What he is pressured to do right now is executive actions on climate
change for instance. The difficulty that comes with it is that, as soon --

O`DONNELL: What`s an example of what you can do --

STEIN: Regulating car been through the executive branch. Yes. The
difficulty in doing this -- as soon as you do it, there will be a legal
challenge to it. And whether the companies respect the executive order or
wait to see the thing go through the court system is a real question mark.
It might make the point moot.

HENDERSON: But progressives very much cheering Podesta`s arrival
because this is something he`d been a champion in.

STEIN: And the other big thing is immigration, obviously. They want
an end to deportations. There`s been a drastic drop in deportations now.
But immigration reform advocates would like --

O`DONNELL: Well, that -- I mean, you can clearly see that. I mean,
that isn`t so much some complicated executive order. That`s just how much
do we do in this --

HENDERSON: Obama has sort of been, you know, he hasn`t been quick to
want to do that. He got into that sort of big back and forth.

O`DONNELL: He has been tough cop on deportation.

HENDERSON: That`s right.

O`DONNELL: And presumably for the political effect of saying, look,
I`ve been tough in this category now. Now, let`s be reasonable. He
assumed there would be a dividend, a Republican kind of --

HENDERSON: To say, yes, look how tough you have been. And now, of
course, he wants to get something done, and you have had movement from
Boehner. He`s hired Rebecca Talent who is a real star in the issue.
Former chief of staffer of John McCain, pushed some early immigration bills
in the Senate that McCain was behind.

So, but again, it`s still all up to Boehner. Not clear that Podesta
can do much.

STEIN: Yes. And that`s a confusing thing about the big scuttle bug
about the Podesta hire, is how much does it actually change? What can you
do on executive order and what can you do on the hill that`s different?

O`DONNELL: Yes.

Nia-Malika Henderson and Sam Stein -- thank you both.

HENDERSON: Thank you.

STEIN: Thanks, Lawrence.

O`DONNELL: Coming up. A new report by the White House task force on
the NSA recommends some big changes at the NSA. One of the authors of that
report will join me in the LAST WORD exclusive.

And in the spotlight tonight, Chris Christie`s bridge maybe to
nowhere.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

REPORTER: Six months after Edward Snowden revealed it to the world, a
federal judge ruled the NSA program that sweeps up American`s phone call
records is likely unconstitutional.

COLBERT: Way to go, nut-lid! Thanks to you the terrorists know that
NSA spying violates the Constitution. And, by the way, who leaked that
thing? I just hope the terrorists don`t find the treasure map on the back.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SEN. PATRICK LEAHY (D), VERMONT: The White House released a report
that prepared by the president`s review group on intelligence. The message
is very clear. The message to the NSA is now coming from every branch of
government from every corner of our nation. NSA, you have gone too far.

(END VIDEO CLIP)

O`DONNELL: That was Democratic Senator Patrick Leahy today responding
to a new report examining the National Security Agency`s surveillance
programs. In its report, the five-member committee, outlined 46
recommendations to address privacy concerns. One of their most significant
recommendations, ending the routine mass collection of phone data and
requiring an order from the Foreign Intelligence Surveillance Court in
order to gain access to that information.

Joining me now, Julian Epstein, Democratic strategist and former chief
council for the House Judiciary Committee.

And joining me for an exclusive interview, one of the co-authors of
the NSA review, Peter Swire. Peter Swire is a professor of law and ethics
at Georgia Tech. He served as chief counselor for privacy in the U.S.
Office of Management and Budget under President Clinton and also served as
a special assistant to President Obama for economic policy.

Peter Swire, first of all. Your -- you are appointed by President
Obama to do this review. And were your findings unanimous?

PETER SWIRE, CO-AUTHOR OF NSA REVIEW: Our findings were unanimous.
Our report was unclassified. What we released to day is what the five of
us came to.

O`DONNELL: As you worked through this -- would you say that, Senator
Leahy`s summary was effectively where you ended up, which is, the NSA has
gone too far?

SWIRE: I say that it`s time to make some reforms. We found much to
admire in the NSA. Their technical capabilities are amazing. The people
are dedicated.

But we do think the way communications have changed, that we should
have some different governance and oversight for how these things work?

O`DONNELL: And what would you say are the most important changes?
Particularly in relation to the metadata, which I think is the issue that
has gotten the most attention?

SWIRE: Certainly has gotten a lot of attention. Today, if they
decide, NSA analyst decides they want to look at somebody`s phone record
they make the decision within the NSA. We say one of those judges in the
FISC, the Federal Intelligence Surveillance Court, should make the
decision.

The other big change is -- today there is one big government database
that gets queried for that. We think that that`s not the right way to hold
this data. So, going to the phone companies or private sector entity, we
think that`s a better way, with better oversight to run this thing.

O`DONNELL: What do you think -- what kind of change do you think that
means in practical terms for people`s concern about privacy. I mean, as of
now, there are two entities that we are aware of holding it. One is
Internet company, the Verizon, the communications company, is already
holding this data. And then the NSA is holding a mirror of the data.

This would eliminate the NSA holding the data. But a private come of
pane would be holding the same data.

SWIRE: One thing to recognize, is that the data we are talking about
today is phone records. It`s not your Internet records. There had been a
program that President Obama discontinued a couple of years ago, that
included your Internet records. So, we`re talking phone records.

And the mirror -- I think there is something different about having
for five years all American phone calls in one place. And you`re not
completely sure from the outside what`s happening, versus companies on the
normal course of business keeping phone records. And we also say it
shouldn`t be more than two years.

So, it`s a shorter time. It`s a different centralized database that
wouldn`t exist the same way as what you are trying to move towards. So, I
think it`s pretty different.

O`DONNELL: Were you concerned on the committee with the concern the
NSA has raised about the need -- if they need to go to the Pfizer court
each time they want to search this data, that they could be in what is
their version of a hot pursuit and they may lose opportunities as a result
of that?

SWIRE: I think two things. One is a series of emergency powers where
you get to do things in the first 48 or 72 hours. We even call for
strengthening that in the certain case for NSA.

The other difference for the NSA is that the number of times they`re
querying this database is a much more limited number, in hundreds of year,
100 a year means we have people and time to get a judge to help out.

So, this is not something that`s happening every few minutes. This is
something we can really manage.

O`DONNELL: Julian Epstein, that`s a really important point, what
Peter just said. One of the reasons that the committee believes they can
go to a judge each time is because the NSA actually does this so rarely.

JULIAN EPSTEIN, DEMOCRATIC STRATEGIST Right. It`s only a couple of
hundred times a year. And remember, it`s important for viewers to keep in
mind that metadata is not content of telephone conversations. It is the
telephone numbers -- identity of telephone numbers that are made -- for
calls that are made to and from a suspected terrorist, the identity of
these phone numbers, the incoming and outgoing calls allows the NSA to
identify terror cells that maybe operating inside the United States.

Now, this report today, and the court`s decision on Monday as we
discussed on Monday, doesn`t say that the collection of metadata is
unconstitutional. In fact, what report is saying is that there is some
value to the collection of metadata. It`s just gotten out of hand.

Too much data is kept on too many Americans. So, therefore, we are
going to try to cabin the system. Put some reforms into the system. By as
the Peter said, requiring that the phone companies keep the data for
certain amount of time and then, requiring a court order, by the FISA
court. If the NSA wants to get in and do the second step of the process,
which is analysis of the data.

So, we`re not in any way talking about the end of data, of metadata as
an important tool for the NSA. In fact, law enforcement all over the
country, state and federal level uses it routinely. We are talking limits
to protect the privacy interest of U.S. average citizens under the
Constitution.

O`DONNELL: Peter Swire, is it your sense, now with your experience
having talked to people at the NSA and putting this together, that they
would appreciate a new set of clarified guidelines about exactly what they
should be doing and how they should be doing it? Because it seems the way
they`re working now has to a certain extent evolved without so many formal
procedural decisions having been made over the course two of presidencies.

SWIRE: Well, you know, there has been an evolution over time. Many
programs came in after 9/11. Some of them were the warrantless wiretaps
that people have criticized so much. I think over the last three, or four
years, there has been more compliance structure. The FISA court chastised
them and they put in a series to respond to it.

So, I think they would thing it is pretty clear already. I think part
of what we are saying is that judges should have a somewhat bigger role and
that it shouldn`t be one big database of all Americans domestic phone
calls.

O`DONNELL: Go ahead.

EPSTEIN: There are a couple points. In addition to the metadata
provisions, there`s an end, as we were discussing before the segment, of
the administrative subpoena that the FBI uses for things called the
national security letters. The ability of the FBI to get things like
telephone records, hotel records, car rental records. The recommendation
of this report is that those administrative subpoenas should also require
some type of judicial supervision.

There are lot of provisions that kind of limit the foreign
surveillance, the kind of surveillance that the NSA does abroad. Limits on
that, limits to make sure that we don`t have another episode like we had
with Chancellor Merkel, where the NSA is actually spying on a foreign
leader, unless there is the proper oversight.

But I think the more important point here is the politics of this. I
think unlike the Bush administration who incidentally had a lot of these
programs in operation without any court supervision, whatsoever, remember
they went to John Ashcroft`s hospital bed to try to get authorization,
Ashcroft threatened to resign over the fact they had no court supervision.
The difference here, President Obama and his team, I don`t think are
ideologues when it comes to this. They are pragmatists who want to find
the right balance.

And I think with this report, presidential commissioned report, and
the decision on Monday, there is a pathway now for the president and Senate
to find middle ground, so that you keep important tools the NSA has to have
in place, to identify terror cells inside the United States. But you begin
to have the proper balance with secure -- with privacy interests by having
proper court supervision at the right intervals.

And I think the president will find the middle ground. And I think
what you will likely see is him doing it early in the year and going back
to the court. You remember the case out of the district court Monday, now
at the court of appeals. I think he goes into the Justice Department goes
into the Court of Appeals, asked that that the case be dismissed because
practices have been reformed. I think you will see the president really
charting out a very sensible process to balance these two interests.

O`DONNELL: Peter Swire, there have been many concerns raised about
what the NSA could do in the way off abusing the data system selections
they have. Did you find any instances of what you would consider serious
abuse, or any kind of abuse of the systems, along the lines of what some of
the critics imagine like -- you know, the NSA can go in and, you know find
what psychiatrist I go to and that sort of thing?

SWIRE: Right. That`s not what we found. I think that`s really
encouraging. And we say this in the report. We did not uncover. We had
classified briefings. We dug, we went to Fort Mead.

We did not find that at all. We found the NSA making really big
efforts to follow the law. And our recommendations are really about how do
we take the law going forward. We have a different communication system
than we used to. The same phones that we use here are used in Iraq and
Afghanistan. So, the NSA has built tools and now, we have to figure out
how to govern that going forward as a democracy.

O`DONNELL: I just want to come back on this point before we go, which
is that the concerns about the NSA abusing these powers that they have
would turn on the -- basically the integrity of the NSA, which is why I
asked this. I want to get a sense of how much you were in a position to
make an evaluation, or whatever evaluation you could make about what you
think is -- the integrity of the people who are operating these processes
within the NSA and how much they respect the limitations that they should
be imposed, should be imposed on them?

SWIRE: My own take is that I saw a lot of integrity. I saw a lot of
evidence of integrity today. And a report says that part of what you do
with checks and balances is you don`t plan for only the good times, but you
plan for times that aren`t so good.

And so, we`re really putting in our constitutional checks and balances
again and I think that perspective really informs our report.

O`DONNELL: You know, I agree with that. I don`t think you should set
up a system that is based on trusting people and that`s why these new
safeguards are important to discuss. But what I was trying to get at is,
given where we are, and the position that your committee had of being able
look at what you believe has already been done, I think your assessment,
being able to tell us what your assessment is, of the integrity level
there, I think is an important thing to know at this point. It doesn`t
mean we should trust that level of integrity forever.

SWIRE: I was hardened by what I found in my own interviews with
people.

O`DONNELL: Peter Swire and Julian Epstein, thank you both very much
for joining me tonight.

EPSTEIN: Thank you, Lawrence.

O`DONNELL: Coming up -- what a temporary bridge closure might do to a
presidential candidacy. That`s next.

(COMMERCIAL BREAK)

O`DONNELL: New Jersey traffic is bad. But right now, it has a very
serious traffic problem.

(BEGIN VIDEOTAPE)

RACHEL MADDOW, MSNBC HOST, THE RACHEL MADDOW SHOW: So, it has been a
big day for the New Jersey bridge story.

CHRIS HAYES, MSNBC HOST, ALL IN WITH CHRIS HAYES: Chris Christie for
his political appointee cronies shut down part of the world`s biggest
bridge in order to punish a political opponent.

CHRIS MATTHEWS, MSNBC ANCHOR, HARDBALL: They tell that it was exactly
a little punishment on the (INAUDIBLE) mayor when fell the Pontiac support
in the November reelection. Did he?

GOV. CHRIS CHRISTIE (R), NEW JERSEY: You really are not serious with
that question.

MADDOW: But wait, t here is more.

HAYES: Christie`s appointees claimed they closed the lane in order to
do a traffic study.

MADDOW: There was a traffic study, yes.

HAYES: The head of the agency that oversees the bridge, said he has
heard nothing about a traffic study.

MADDOW: No, there was no traffic study.

HAYES: Half-hour commutes taking four hours.

MADDOW: But wait, there is more.

HAYES: So, he prompted two handpicked Christie appointees to resign.

MADDOW: But wait, there is more.

HAYES: The reason this scandal is exploding is simple.

MATTHEWS: It looks like this governor who I thought had political
moxie, doesn`t.

HAYES: No one can explain why Christie`s allies ordered the lanes
closed if it wasn`t for petty political payback.

MADDOW: But wait, there is more.

(END VIDEOTAPE)

O`DONNELL: Joining me now is David Corn, an MSNBC political analyst,
and Hunter Walker, national affairs reporter for Talking Points Memo.

And Hunter Walker, the George Washington bridge is suddenly a national
affair. You are great at covering local action, political action, in New
York.

But OK, here is what I do not get. Someone has got to explain to me.
OK. Since when do you punish a political opponent by closing a traffic
lane? Who blames a local mayor in New Jersey about traffic on the George
Washington bridge?

HUNTER WALKER, NATIONAL AFFAIRS REPORTER, TALKING POINTS MEMO: Well,
you know, Fort Lee is the town that is right at the base of the bridge.
So, when these lanes were shut there was massive gridlock throughout the
town for five entire days.

O`DONNELL: Oh, so, you punish the entire town of Fort Lee. That you
make life impossible there because of this.

WALKER: Yes. And --

O`DONNELL: And in just, to follow through the conspiracy theory. In
the Christie team mid, this traffic caused by the bridge will be blamed on
the local mayor.

WALKER: Well, you know, we don`t for certain that Christie himself
order it. But as one of the Democrats involved in the investigation said
to me. There is no other plausible explanation at this point. And the
mayor`s initial statements were, you know, am I being punished for
something with a wink and nod?

And there is a lot of chatter around New Jersey that there was really
intense pressure on Dem mayors to endorse Christie. And these are
Democratic mayors. But, you know, he wanted such a wipeout against Buono.
And he is so wanted So wanted this impression that he is bipartisan because
it matters for his brand that he was really pushing hard here.

O`DONNELL: David Corn, I am struggling here. I mean, because, I
mean, I love the idea that there is no other plausible explanation which
seems to suggest this one is plausible. But now, we have got some
resignations involved and they are starting -- a lot of smoke developing
here.

DAVID CORN, MSNBC POLITICAL ANALYST: You know, often, in a situation
like this, you might think some are hyperventilating, you know. It is
like, you know, we are thinking, sopranos too much, nice little bridge you
got there. Pity if anything should happen to it. In fact, traffic up into
your pretty little town.

But the thing is, two of his cronies, the guys were involved in making
the decision to close the lanes, both have resigned really quickly. They
Loire up.

O`DONNELL: Simply because they can`t explain why they closed the
lanes.

CORN: Well, there was one claimed that was a traffic study. Other
people who work for the port authority, said we don`t know about any real
traffic study and said usually they take years to design, and implement,
you don`t do a, going to have a traffic study tomorrow. Close those lanes.

But the whole thing is that, you know, there is a bigger question here
too is the amount of cronyism in the New Jersey state government. I know
that doesn`t surprise a lot of people. But the port authority is a really
big deal in terms of money and patronage. And if he is putting his high
school buddies, as he did in this case, into these jobs. And they`re
deciding to, you know, use their elbows to knock around the mayor of Fort
Lee. That could actually hurt.

O`DONNELL: All right. Well, here is what we learned. If this is
Chris Christie`s idea of political warfare, it is the stupidest possible
choice he could have made. Let`s look at what the Democratic National
Committee is doing with this.

(BEGIN VIDEO CLIP)

CHRISTIE: Senator (INAUDIBLE) his resignation and I accepted it.
but, this was nothing that I hadn`t planned already. Yes, I still think
it`s a whole lot of hullabaloo. Three lanes for one town is too much. You
really think like I want to now go and, show me the traffic study so I can
read it. You didn`t stay there wasn`t one. I think he wasn`t aware of
one. And it is difficult to explain why you didn`t do something when you
didn`t do -- not do it on purpose.

I don`t feel blamed for this at all because I had nothing to do with
it. We`ll see you all soon. Have a good weekend. And it is difficult to
explain why you didn`t do something, when you didn`t do -- not do it on
purpose.

(END VIDEO CLIP)

O`DONNELL: OK. And here is some more maybe fire in the smoke, OK.
Last week "the Wall Street Journal" reported that New Jersey governor Chris
Christie called New York governor Andrew Cuomo to complain that Patrick
Foye, the executive director of the Port authority of New York and Jew
Jersey was pressing too hard how to get off to the bottom of why the number
of toll lanes on the bridge was cut from three to one in early September.

Hunter Walker, I got to say, the thing that it`s amazing here is, it
is such a stupid idea. If it is a politically motivated idea.
Breathtakingly stupid. But everything in Christie world is doing makes it
look like they were up to something.

WALKER: Well, and you know, Andrew Cuomo was asked if he believed
Chris Christie`s explanation of this, the traffic study story, and he just
paused for six second and he kind of said, well, if Chris Christie said it,
it must be true. And you know, it was one of those sort of, wonderful
Cuomo Cohens where it was a little bit of a riddle to figure out what he
actually meant. But it was hardly a heartfelt endorsement.

O`DONNELL: David, very quickly before we go, what does this do to
Christie?

CORN: Nothing yet. E-mails come out, showing that he has lied, that
he knew about it or that his cronies just were having fun. And that
indicates he surround himself into. It could turn in to something big.
You know, if he was innocent, if it was done for a study, a good reason,
they should be able to prove that.

O`DONNELL: Very quickly. Very quickly.

David Corn and Hunter Walker, thank you both for joining me.

Coming up in the "rewrite," rewriting the image of a two-time losing
presidential candidate as you have never seen this before. You should see
this.

And later, Stuart Milk joins me to discuss President Obama`s refusal
to attend the Russian Olympics.

(COMMERCIAL BREAK)

O`DONNELL: So far this holiday season, with your amazing help and
generosity, we have raised a total of $455,847 on behalf of the K.I.N.D.
fund, kids in need of desks. That brings the total raised for desks and
scholarships since we began this program a few years ago, to $6,231, 363
for desks in Malawi schools, made in Malawi, delivered to Malawi schools
and for scholarships for girls in Malawi.

Ruth (INAUDIBLE) tweeted. I donated last night in the names of five
grandnieces and grandnephews. And thank you for your efforts in this
project.

Mary Conan (ph) wrote on facebook, to honor my brother`s life, also an
educator, I donated what I could to the K.I.N.D. fund. He would be happy
to know his life meant so much and would appreciate the generosity of
others to the fund.

And finally, Charlene Jones wrote, I really would look to see us get
the number up to $12 million so all of the kids can hatch desks and all
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every day and I hope it does the trick.

You can donate at lastworddesks.MSNBC.com or you can call 1-800-4-
UNICEF.

The "rewrite" is next.

(COMMERCIAL BREAK)

O`DONNELL: A new documentary attempts to rewrite the image of Mitt
Romney. The result is Mitt, whatever side you are on, see another side
which debuts January 24th on Netflix. It is the work of director, Greg
Whitley, who spent six years tracking two losing Romney presidential
campaigns.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: I just can`t believe you are going to lose.

MITT ROMNEY (R), FORMER PRESIDENTIAL CANDIDATE: Yes, yes.

UNIDENTIFIED MALE: What do you think you say in a concession speech?

ROMNEY: By the way, someone have a number for the president?

UNIDENTIFIED MALE: I do.

ROMNEY: OK. I hadn`t thought about that.

UNIDENTIFIED MALE: If you don`t win, we`ll still love you. The
country may think of you as a laughingstock, and we will know the truth and
that`s OK.

ROMNEY: It was a very different setting than any of the debates we
held so far. A dine of conversation among members of the family. These
are all people competing for the same job.

How in the world do we find this out on the day of the debate.

UNIDENTIFIED MALE: He hates to disappoint.

UNIDENTIFIED FEMALE: Are you going to iron that?

UNIDENTIFIED MALE: This may not end well.

UNIDENTIFIED MALE: A recent poll said that 43 percent of Americans
are not even sure who you are.

ROMNEY: The flipping Mormon.

UNIDENTIFIED MALE: How did you feel on stage?

ROMNEY: I was dying.

UNIDENTIFIED FEMALE: I would not want to do this again. It is too
much.

UNIDENTIFIED MALE: What happens to anybody in this country who loses
as the nominee of the party. They becoming a loser for life.

Barack Obama has changed our race, changed our prospects.

Much more effective debater than they are.

UNIDENTIFIED MALE: Just getting beat up constantly. Mitt Romney is a
flip-flopper. This, a that. Is this worth it.

ROMNEY: It was like trying to convince people that Dan Quayle is
smart, all right? You are not going to convince them that Dan Quayle its
smart and maybe, I can`t live with that. And you flip on everything. In
which case, I think I am a flawed candidate.

UNIDENTIFIED MALE: Please welcome the next president and first lady -
-

(CHEERS AND APPLAUSE)

UNIDENTIFIED MALE: A year ago, we would love you no matter how this
thing turned out.

ROMNEY: Now you are not so sure.

UNIDENTIFIED MALE: Now we are not so sure.

(LAUGHTER)

(END VIDEOTAPE)

(COMMERCIAL BREAK)

O`DONNELL: Up next, Stuart Milk joins me to talk about the
president`s choice of Billie Jean King to lead the delegation to Russia`s
Olympic Games.

(COMMERCIAL BREAK)

O`DONNELL: For the first time in more than a dozen years, a
president, vice president or first lady will not be part of the U.S.
delegation to the Olympics. Instead the White House announced the official
group that will attend the winter Olympics in Russia will include two
openly gay former athletes, tennis great Billie Jean King and two-time
Olympic hockey medalist, Caitlin Cahow. White House secretary, Jay Carney
said this about the delegates today.

(BEGIN VIDEO CLIP)

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: We are sending the message
that the United States is a diverse place. And this delegation represents
that diversity. Not because of the issues on which we disagree with Russia
alone, but because of the remarkable accomplishments of every individual in
the delegation.

(END VIDEO CLIP)

O`DONNELL: Joining me now is LGBT rights advocate and cofounder of
the milk foundation, Stuart Milk.

So Stuart, this was a big question is, was how was the president in
terms of his personal conduct, first of all, going to respond to what we
have seen in Russia this years and in terms of the Olympics and the big
decision on the presidential level was, does the president go before you
get to who does he send if he doesn`t go?

STUART MILK, LGBT RIGHTS ADVOCATE: Right. Well, I mean, it is a very
strong message. It is a very potent message which is that, you know, we
are not sending any senior member of the administration that Russia has
taken many steps backwards. Not just in the LGBT rights, but in freedom of
the press and other marginalized groups. So that is, I think, significant.
And then it does have that second part about who he does send.

O`DONNELL: Well, to stay with the first part for a second, there is
also the Snowden component of the president`s own decision, not to go,
which surely must have been a factor. But then when you look at, here is
who the president is deciding to send as part of an official delegation.
What does that tell us?

MILK: Yes, I mean, I think it send a huge message to not only the
Russian leadership but it sends a message to the Russian people that United
States values diversity, that United States stands up for the evolution of
equality. And that we don`t respect going backwards.

And I really I do think that the, you know, Billie Jean King is
someone who I say has guts and grace. So, she is going too out there and
she is going to be very graceful, but she is going to be very forceful.

You know if you talk about someone who took on, rigs in 1981, to make
a statement for women`s equity, you know, this is someone who has got it in
her bones to go out there, make a statement, but she is very graceful. You
know, I had the honor of being with her when she got the presidential medal
of freedom. I was accepting on behalf of my uncle, you know. And she
talked about how meaningful it was for the example of Harvey Milk to be
out. And, of course sun, she followed really, a trend setting and record
breaking being out.

You know, just such an accomplished athlete. And showing the best of
athletic -- everything good about athleticism, you know, that it is a sport
that values competition, regardless of who you are, who you love, what
color is your skin. And it is really the ideals of what the Olympics is
supposed to be about.

So, I really do think that it is very important. The real interesting
thing is that Caitlin is from a different generation. So Billy Jean is
going to be able to discuss what it was like, to actually be in an
environment that a lot of Russians are tine din today where we don`t of
that value people being out.

And Caitlin be able to talk about coming up where we have evolved as a
country. And I really do think there is an educational component to this
that is very, very strong. The fact that, you know, that they`re leading
these delegations, I think, sends a message beyond Russia. You know, it
sends a message into India which just recriminalized homosexuality. It
sends a message across the world.

O`DONNELL: Yes. We forget in a situation like this, when one country
becomes high profile on this. It is not a one country problem.

MILK: Very important. The propaganda law is in many countries. And
of course, we have 77 countries that still, still criminalize being LGBT.
So it is a very, very powerful message. I think we have two very
articulate, very eloquent, and very forceful representation of what
diversity means, and that is certainly include LGBT people.

O`DONNELL: And when the president makes the selections, he knows they
will be available for interviews in Russia. They`re going to be asked
question about this. The issue will be very much alive wherever they go.

MILK: Absolutely. I mean, I really do think that the president`s
team was brilliant in their selection. And again, I say, that you really,
you really would, would struggle to find someone better than Billie Jean
King to lead this and to have a generational co-equal in Caitlin. You
know, this is someone who is a hockey player. They You know, both smash
stereotypes, myths, lies that had been spread about LGBT people and that
are still being spread in places like Russia, Eastern Europe and in many
dark corners of the world.

O`DONNELL: And what does this mean in terms of the, issue of
boycotting the Olympics, I don`t mean for athletes. I think we are past
that question. But people have been talking about they`re going to
boycott. They won`t go to Russia. And they won`t go as spectators. And
they won`t, in any way, you know, encourage people to do that. How do you
think this affects that?

MILK: Well, you know, I like having dialogue. I like having
opportunity for dialogue. Boycotting does send a message. But
unfortunately, in places where freedom of the press is under pressure. You
know, there is governments that can taint that message. And so, when you
actually have people there, no one is going to put a zipper on Billy Jean
King`s mouth. And she is going to be an eloquent and a forceful,
influencer there.

So, you know, I understand the people who say boycott. But I think
dialogue and changing hearts and minds is much more powerful. And in all
of the places I have been, in the dark corners, that`s the power.

O`DONNELL: Stuart Milk gets tonight`s last word.

Thank you, Stuart.

MILK: Thank you.

O`DONNELL: Chris Hayes is up next.

END

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