updated 1/21/2014 3:47:08 PM ET 2014-01-21T20:47:08

POLITICS NATION
January 20, 2014

Guesst: Kendall Coffey; Bonnie Watson Coleman; Loretta Weinberg, Krystal
Ball, Joan Walsh, Martin Luther King III, Karen Bass

REVEREND AL SHARPTON, MSNBC ANCHOR: Good evening, Ed.

And thanks to you for tuning in. Tonight`s lead, a major development in
the Chris Christie administration probes. There are new allegations of
political corruption involving money for hurricane Sandy recovery,
allegations that have escalated into a federal criminal investigation.

Dawn Zimmer, the mayor of Hoboken, New Jersey, says she met yesterday for
more than two hours with the U.S. attorney. This comes after she made the
explosive claim that Christie`s lieutenant governor threatened to withhold
hurricane Sandy relief money unless she approved a real estate project
favored by the governor. Mayor Zimmer first told the story on "Up with
Steve Kornacki."

(BEGIN VIDEO CLIP)

MAYOR DAWN ZIMMER (D), HOBOKEN: The fact is the lieutenant governor came
to Hoboken. She pulled me aside in the parking lot and said I know it`s
not right. I know this thing should not be connected. But they are and if
you tell anyone, I`ll deny it. And so these imminent -- the bottom line is
it`s not fair for the governor to hold Sandy funds hostage for the city of
Hoboken, because he wants me to give back to one private developer.

(END VIDEO CLIP)

SHARPTON: And Mayor Zimmer showed what she said, her hand-written entries
in her diary as proof of her veracity.

These are serious allegations after hurricane Sandy, Hoboken was submerged,
a city in crisis. Eighty percent of Hoboken was under water. The state
had more than $2 billion to disperse. Mayor Zimmer says Hoboken asked for
$100 million in help and got just 342,000 because she refused to play ball.

Today, the Christie administration fought back. The governor`s office says
Hoboken has received $70 million and lieutenant governor Kim Guadagno
denied the accusations.

(BEGIN VIDEO CLIP)

LT. GOV. KIM GUADAGNO (R), NEW JERSEY: Mayor Zimmer`s version of our
conversation in May of 2013 is not only false, but is illogical, and does
not withstand scrutiny when all of the facts are examined. Any suggestion,
any suggestion that Sandy funds were tied to the approval of any project in
New Jersey is completely false.

(END VIDEO CLIP)

SHARPTON: A spokesman for the governor called Mayor Zimmer`s allegations,
quote, "categorically false."

Richard Constable, another Christie official who Mayor Zimmer also says
made threats over Sandy aid said in a statement quote "Mayor Zimmer`s
allegations are patently false a absurd on their face. I welcome a full
and thorough law enforcement review of her libelous claims.

That full and thorough law enforcement review is already under way,
including the mayor`s diary which she says is a contemporaneous account
that corroborates her story. She has shared that diary with federal
investigators.

Joining me now is assemblywoman Bonnie Watson Coleman, a member of the new
committee investigating the Christie administration, and former U.S.
attorney Kendall Coffey.

Thank you both for being here.

ST. REP. BONNIE COLEMAN (D), NEW JERSEY: Thank you for having me,
Reverend.

KENDALL COFFEY, FORMER U.S. ATTORNEY: Thank you.

SHARPTON: Assemblywoman, these are some explosive aches from the mayor of
Hoboken, and a strong denial from the lieutenant governor. Now they both
can`t be telling the truth. Who do you believe?

COLEMAN: I don`t have any reason to believe that the mayor had any reason
to tell anything other than what she believes to be the truth under the
circumstances.

SHARPTON: Now, she made the allegations or statements first here on MSNBC.
MSNBC, Steve Kornacki first reported on the mayor`s diaries. He read it,
an entry, Zimmer was says is right after the alleged threat from Kim
Guadagno. Listen to this.

(BEGIN VIDEO CLIP)

STEVE KORNACKI, MSNBC HOST, UP WITH STEVE KORNACKI: She says when it
happened, she was so shocked that she wrote it down in her personal diary,
which she has shared with us. And here is how she describes the threat
Guadagno made in an entry in that diary dated May 17th.

Quoting from it, "at the end of the big tour of Shoprite and meeting, she
pulls me aside with no one else around and says that I need to move forward
with the Rockefeller project. It is very important to the governor. The
word is that you are against it, and you need to move it forward, or we are
not going to be able to help you.

(END VIDEO CLIP)

SHARPTON: Now, Assemblywoman, there is a project here with a lot of money
that she is claiming they wanted her to support. There was also a project
in Fort Lee. Are we looking here that there is a possibility that this is
not about all that we thought and with this great reporting by Steve
Kornacki, that we`re beginning to see that there is some possible real
corruption around developments, something that we`ve heard before in New
Jersey, more than just some political retribution?

COLEMAN: As member of the committee, I don`t want to prejudge anything. I
can simply say that as one thing unfolds, it seems something else is peeled
away. So we`re looking into all of it. We`re looking at the issue with
the bridge gate. We`re now just recently being advised or being informed
of the issues with Hoboken. We will be meeting as a committee to discuss
where we go from here.

But I think that what we`re looking at, what we`re seeing is the unfolding
of issues as it relates to how governance has taken place. I don`t want to
categorize it. I don`t want to assume anything. I don`t want to presume
anything. I think that we`re looking at this comprehensively, Reverend.
And have information coming in. You know, we serve subpoenas, and we`re
looking forward to see where does the information take us?

SHARPTON: You know, Kendall Coffey, you were a U.S. attorney. Does the
fact that she met with someone in the us U.S. attorney`s office for a
couple of hours on a Sunday, the day before a holiday, am I reading too
much into that, or is this significant?

COFFEY: Well, of course it`s significant. And it`s much too early to know
how this is going to turn out. This could be a case where at the end of
the day, what you end up with is the mayor`s version, perhaps with some
diary entries that support it. And other people categorically deny it, as
they`re saying, and it may be very, very hard to get further documentation.
But there is one thing we can be confident about. When somebody such as
the mayor meets with the federal authorities, there will be FBI agents
there, she`s got to know going in that if she lies to them, that`s a crime.
False report isn`t a prank. It`s a federal felony if you make specific
allegations to the FBI when you`re being interviewed.

SHARPTON: Wouldn`t the same be true, Kendall, if the Lieutenant Governor
Guadagno who has denied this and the other party, Mr. Constable, who has
also denied it, wouldn`t they have to be interviewed? And wouldn`t they be
subject to the same perjury charge if members of the FBI or others were
there?

COFFEY: Anybody who makes false statements in interviews with the FBI can
be subject to a federal felony. Now, so far the lieutenant governor and
Mr. Constable have not met with the FBI. And it`s not a crime, like it or
not, to lie to the media. So it remains to be seen whether and when they
will give statements to federal investigators. But you`ve got to think
that at this point, what the feds want to do is there anything that is
going to corroborate the mayor`s version or discredit the mayor`s version
in terms of e-mails, in terms of text messages.

SHARPTON: So it`s preliminary now. I mean, take us inside. You were in
the U.S. attorney`s office. What stage would they be at now?

COFFEY: Well, they`re not typically looking to interview either the
lieutenant governor or the commerce commissioner at this point because they
assume that when they interview them, they`re going to deny the whole
thing. So what they`re trying to do is find out are there other witnesses,
are there other documents, e-mails or texts that could help decide when
what we see at the end of the day may be a she said versus he and she said.
How do you get some documentation to carry the balance.

Remember, that prosecutors have to prove things beyond a reasonable doubt.
And I`m not sure you`re ever going to see an e-mail in this scenario,
Reverend, that says something like time for some funding problems in
Hoboken.

SHARPTON: Would that be the lieutenant governor`s documents they would be
subpoenaing?

COFFEY: They would be looking for e-mails and text messages from the
lieutenant governor, from anyone else that they have reason to believe
might have been in communication about it. But be prepared, because this
could very well be the situation where no one was e-mailing or texting,
that there were some words said, if anything wrong happened. And sometimes
even though there is obviously considerable concerns, some particular
situations become very, very difficult to prove or disprove.

SHARPTON: Assemblywoman, Governor Christie`s allies are accusing New
Jersey Democrats of playing politics. I mean, here is former New York city
mayor, Rudy Giuliani. Listen to this.

(BEGIN VIDEO CLIP)

RUDY GIULIANI, FORMER NEW YORK CITY MAYOR: It clearly is a partisan witch-
hunt. Clearly this is a very well orchestrated democratic kind of
organizational effort to try to hurt Governor Christie.

(END VIDEO CLIP)

SHARPTON: Your response?

COLEMAN: Well, just a couple of weeks ago, the governor was talking about
the bipartisanship in New Jersey. And Democrats have been talking about
working with this governor. We didn`t create this problem. We didn`t
generate that e-mail. We didn`t cause any traffic jam. So I think that
that is just an unfair statement on the part of the former mayor to suggest
that we`re on a witch-hunt.

We have responsibility here. Information has come to us. And as we tried
to isolate the information and get some answers on what happens, more stuff
opens up. We`ve got to follow the trail of the information. That`s simply
what we`re doing. And to suggest that Wisniewski has been anything other
than fair, even the Republicans on the committee have praised him for being
fair and for the committee to be judicious in the way it`s been carrying
out its business.

SHARPTON: Mr. Coffey, is what Mayor Zimmer saying, is it illegal? Is
there a law being broken just on the face of what she has accused the
governor and his people of?

COFFEY: Well, if we take her accusations, and there is a presumption of
innocence, as we remind ourselves, if her accusation is she was told that
funding -- federal funding, hurricane relief is not going to come to your
city unless you play ball with a private developer, those allegations, if
proven, could certainly lead to a federal crime. The test would be whether
or not that kind of demand was done corruptly. And from the standpoint of
prosecutors, there are federal statutes would make those kind of
allegations potentially indictable.

SHARPTON: Well, assembly woman, it looks like this case is evolving rather
than coming to some resolution.

Assemblywoman Bonnie Watson Coleman and Kendall Coffey, thank you both for
your time.

COLEMAN: Thanks for having me.

COFFEY: Thanks, Reverend.

SHARPTON: Coming up, with a federal investigation, we`re starting to see
real pushback from Governor Christie`s office.

And five years ago to the day, our first black president was sworn in.
Today, President Obama`s candid comments about race and his presidency.

And honoring the dream of Martin Luther King day, Martin Luther King III
will be my special guest. Stay with us.

(BEGIN VIDEO CLIP)

MARTIN LUTHER KING, ACTIVIST: And I`ve seen the promised land. I may not
get there with you, but I want you to know tonight that we as a people will
get to the promised land.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

SHARPTON: Ahead, the federal government starts to investigate explosive
claims by the mayor of Hoboken, New jersey. But meantime, another
investigation continue to look into the mystery of bridge gate. The head
of the Senate investigation joins me, next.

(COMMERCIAL BREAK)

SHARPTON: Back now with more on the investigations into Governor Chris
Christie and his administration.

Joining me now, New Jersey state Senate majority leader Loretta Weinberg.
Loretta Weinberg chairs the Senate committee investigation.

Senator, thanks for being here tonight.

STATE SENATE LORETTA WEINBERG, NEW JERSEY: Thank you, Reverend Sharpton.

SHARPTON: I want to start by asking you about this latest allegations by
the mayor of Hoboken. She says relief money to her city was held up
because she did not approve a real estate deal with the Christie
administration and what it wanted. Today the attorney general of the state
denied the allegations. Who do you believe?

WEINBERG: Well, since I am on the committee actually chair of the Senate
committee that will be investigating some of these charges, some of the
allegations, we`re going to go wherever the evidence leads us. As you
correctly pointed out, these are right now allegations. .

SHARPTON: I said attorney general. I said the lieutenant governor.

WEINBERG: The lieutenant governor Kim Guadagno went on TV earlier today
and denied the allegations. Mayor Zimmer has visited with the U.S.
attorney, apparently spent several hours in his office yesterday, has said
she would answer these questions in the same way under oath and would be
willing to take a lie detector test.

We will now see exactly where this evidence leads us. And whether or not
it is indication of kind of a pattern we`re seeing, or maybe seeing of
public money, public infrastructure being used to punish people if they
don`t do what the administration wants. And I guess it first came to light
with the George Washington bridge issue.

SHARPTON: Does it sound credit to believe you? I mean, when you think,
Senator, this is a mayor coming forward, some say late, but there seems to
be no reason for her to come and put herself in legal jeopardy and make
some very serious charges.

WEINBERG: Well, she certainly has made very serious charges. And as I
said, the lieutenant governor has denied them. But it would be difficult
for somebody to come forth with a story that they might have just made up.
I can`t really judge that. But I know Mayor Zimmer has been a big support
over the governors, even though she is a Democrat, a known Democrat. She
supported the governor the last couple of years in many of his endeavors.
So I would find it very strange for her to be putting herself out there
right now.

SHARPTON: Now, you use, and I want to get to your investigation. But you
use the term pattern. Do you see a pattern with this, governor?

WEINBERG: I think that what I`ve said from the beginning, and what I`ve
said really from the beginning of my involvement with trying to figure out
what went on with the horrendous traffic jam that was created in the area I
represent, it`s that the governor has to be responsible. If in fact he has
created an environment that make his top appointees, his employees, his
chiefs of staff or deputy chief of staff think that this kind of behavior
is appropriate. He looked in the camera at one point and said I asked
myself what did I do wrong that my staff lied to me. I would say the
question should be what did I do wrong to make my staff think this was OK?.

SHARPTON: Right.

Now, you talk about a pattern, but your committee has subpoenaed documents
from three people, David Samson, who is the chairman of the agency that
runs the bridge, William Pat Schuber, commissioner of that agency and
Regina Egea, who is Christie`s incoming chief of staff. What exactly are
you hoping to find out from these documents?

WEINBERG: Well, that`s a beginning for us. And it reflects my very early
involvement with this. I wrote to Commissioner Schuber back on September
19th. He promised me that he was going to get to the bottom of it. I
chose him because he is a former Bergen county executive. He is somebody
from the other side of the aisle, by the way, whom I voted for so that he
could become a commissioner. And I knew he knew Bergen county well.

SHARPTON: So you wrote Schuber about the traffic jam.

WEINBERG: Yes, on September 19th. With copies to chairman Samson and to
the governor himself. And when commissioner Schuber called and promised he
would get to the bottom of this in some of the subpoena documents I`ve
seen, what he did is go to the very same David Wildstein to ask him to
compose a reply to me. And I want to know what all of these people did
from the time it became public, from the time they found out about it, and
I know they found out about it in September, because I was responsible --

SHARPTON: The letter you wrote Shuber in September, you copied the
governor?

WEINBERG: I did.

SHARPTON: Which means if the governor read the letter or someone in his
office, they had to know then about the bridge closing problem.

WEINBERG: Absolutely.

SHARPTON: Which is a complete contradiction to what he has said?

WEINBERG: Which -- you are absolutely right, Reverend Sharpton. And I
said maybe I`m on that do not reply list that I wrote a letter, obviously
on Senate stationary. I represent the barrel of Fort Lee. This created a
huge traffic jam in the entire geographic area that I represent. And I
said I want to know the answer. What happened here? Why weren`t local
officials informed. I have not gotten a reply yet.

SHARPTON: It would be hard to imagine even if you were on the do not reply
list, the governor not reading a letter from the majority leader of the
Senate in his state. I think that would be irresponsible.

WEINBERG: I would hope that that you`re not right. But in fact I know
what I did, and I know I didn`t get a reply.

SHARPTON: I`m going to leave it there. New jersey state Senate majority
Leader Loretta Weinberg.

Thank you very much for your time.

WEINBERG: Thank you, Reverend Sharpton.

SHARPTON: Coming up, why is President Obama the target of so many personal
attacks? He is getting personal in a new interview.

Plus, Chris Christie breaks his silence to the press. What did he say
about his anger?

Plus, Rush Limbaugh is weighing in on the scandal, and it may surprise you.
Stay with us.

(COMMERCIAL BREAK)

SHARPTON: With the exception of his lengthy press conference 11 days ago,
Chris Christie has steered clear of the media. But he is now giving his
first interview to Yahoo! news. He says, quote, "I`m trying to get my arms
around an awful situation." When asked if he was ready to be president, he
said he was, quote, "readier." He also said this about his style. Quote,
"I`m not growing a new personality at 51." He said the reporter reminded
him that politicians do it all the time. Not me, man, he laughed. This is
it. I like who I am.

More on governor Christie and the growing investigations, next.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED WOMAN: Don`t forget, when the lieutenant governor of the
state of New Jersey pulls you aside in a parking lot and says I know it`s
not right. I know these things should not be connected, but they are, and
if you tell anyone, I`ll deny it, you remember it.

(END VIDEO CLIP)

SHARPTON: And that bombshell has now launched a federal investigation into
the Christie administration. The New Jersey U.S. attorney is looking into
the claim that Sandy relief money would be withheld from the city of
Hoboken, New Jersey, unless the mayor there approved a real estate project.
And the bridge scandal. Eighteen people were subpoenaed, including the
governor`s office itself. And even with all this, Governor Christie is
trying to move forward.

He was in Florida over the weekend, fundraising for Florida Governor Rick
Scott. But there were no photo ops, no cameras, no press. Only small
glimpses of him. Tomorrow is his inauguration. It was supposed to be a
day of celebration, a day to showcase a Republican star in the 2016 hopes.
Instead, he is fighting for his political life.

Joining me now is MSNBC`s Krystal Ball and Salon.com`s Joan Walsh. Thank
you for joining us.

KRYSTAL BALL, MSNBC CO-HOST, "THE CYCLE": Thanks for having us, Reverend.

JOAN WALSH, SALON.COM: Thanks, Rev.

SHARPTON: You know, Joan, this Hoboken story is very different -- it`s a
very different thing altogether. What is your reaction?

WALSH: Well, if the mayor is making this up, you know, she`s got a real
problem there is nothing, you know, in my gut or there is nothing from the
evidence that says to me that she is not telling the truth. She has gone
to the U.S. attorney`s office. If for some reason this were not true, she
is getting herself in a world of trouble.

BALL: Why? For what?

WALSH: And why? Exactly. What does she gain from this? She`s got
nothing to gain except trying to help her constituents and help her city.
And she is obviously been very pained about this, because she was trying to
play ball in a difficult situation.

SHARPTON: And this is a mayor, Krystal, that has said favorable things
about him. This is not someone that has been a vociferous critic of his.
So, even though some questions the timing, and that she said positive
things, in my opinion in fact that she`s has been positive takes away from
people saying that it is political.

BALL: I totally agree with that. You know, now they`re trying to paint
this as some sort of partisan hack job where she wanted to take him out
when she saw the opening. But she even said with that interview with our
own Steve Kornacki that she thinks he is a good governor.

SHARPTON: Right.

BALL: You know, she is very disappointed obviously in the corruption and
the way that he has handled himself. But the tax cuts she said helped
Hoboken. She listed a few other things that he had done that helped her
city. So she has obviously been deeply conflicted about this. And I just
I don`t understand why she would lie in this situation. What does she
possibly have to gain? And this is someone, again, who had a good working
relationship with Christie. So why would she now turn around if it wasn`t
true and say these things?

SHARPTON: Well, she has talked to federal investigators now. She knows
she could be in a lot of trouble if she misled them.

WALSH: Right. She would have to be having some kind of break with reality
in which she concocted this idea.

BALL: And wrote out the whole journal --

WALSH: And wrote out and went back and wrote out of journal.

SHARPTON: Which I`m sure will be tested to make sure that with the ink,
you can determine if the date is what it says.

WALSH: Right.

SHARPTON: And why would somebody just put themselves in the middle of
this?

WALSH: OK, let`s go for it. Let`s imagine she is making this up. If
you`re going to fantasize, why not make it about Christie himself? You
know? I mean --

SHARPTON: Right.

WALSH: It`s so -- it has the ring of truth. And the lieutenant governor
has denied it and we should say that. But she also didn`t take any
questions today. You know, she talked tough in a statement and then she
walked away. You know, the U.S. attorney is looking into this.

SHARPTON: Well, she and the other of the gentleman that was named by the
mayor also have denied it. And then Krystal they said this is politics.
They`re pushing back hard in the governor`s office. One said this station,
MSNBC. And you know, I know as a preacher, if you preach a bad sermon,
blame the microphone.

BALL: That`s right. Talking to microphone.

SHARPTON: But I mean, this situation is very serious.

BALL: It is very serious. And I think, you know, any one of these stories
maybe individually would be survivable. Right? You could say it was an
aberrant event. You could say I dealt with the aides. I really apologize
and you can move forward. But what you`re seeing now what is developing is
a picture of an administration that was bent on punishing political enemies
in a completely unacceptable way. And I thought, you know, the quote from
the mayor that was in her journal was absolutely devastating where she said
that he was cut from the same corrupt cloth as the people that she has been
fighting against for four years.

SHARPTON: Joan, is it taking a toll? I mean, Chuck Todd was on morning
Joe this morning, talking about what he is hearing from big donors in
Florida.

WALSH: Right.

SHARPTON: Let me play what he said and get your reaction.

(BEGIN VIDEO CLIP)

CHUCK TODD, NBC NEWS CHIEF WHITE HOUSE CORRESPONDENT: They say that the
guy they met this weekend was the shell of his former self. He was not
himself. If that is the guy that is going to be nationally, his 2016 hopes
are done. As for what is going on in New Jersey, I think he is finding out
that -- you know, he is finding out he made some enemies maybe he didn`t
know that he had made.

SHARPTON: Is it taking its toll do you think, Joan?

WALSH: Oh, I think it`s absolutely taken its toll. I mean, just that
little montage that you ran earlier, Rev, of him sort of in a town car
looking like a suspect, he should be down there. This should be his glory
days as the head of the Republican Governor`s Association, right?
Launching this year where he is going to work for all these candidates and
where he is going to be a national leader, if not the national leader of
this party. Instead, he is slipping into town cars and being driven away
like there is something wrong. It`s not what anyone expected from this
coming out party this weekend in Florida.

SHARPTON: Now, Krystal, the governor did talk to Yahoo news, and the
reporter said Christie went out of his way to say he was not an angry
person. I`m quoting the governor.

WALSH: He is not a bully either.

SHARPTON: "It doesn`t mean I don`t get angry. Everybody gets angry. But
they confuse sometimes if you`re blunt and you`re direct and you just say
things the way you see them, that that`s anger. More times than not it`s
not anger with me, it`s just my personality."

BALL: Well, you know, he and his staff have cultivated this image. They
have intentionally recorded his interactions with constituents where he
yells at them, where he chases them down the boardwalk. So, you know, if
he is not feeling anger, that`s what I typically see as an angry response.
But more broadly speaking here, I think the question around Sandy aid and
Hoboken impersonator goes to the core of who he has been representing
himself as, right? The truth teller, the person who would put his own
state and his citizens above all else, particularly where Sandy is
concerned. And someone who reaches out with an open hand to people on the
other side of the aisle. Now we`re seeing him in a very, very different
light.

SHARPTON: Now, also, another reporter who was in one of the closed door
sessions in Florida, Joan, according to this strategist, he is not a
reporter, a strategist said that Christie said the answer to any 2016
question is, come see me next year.

WALSH: Yes. That`s not what he was saying even a few weeks ago, Rev. So
he is clearly chasing. And he is also, you know, he and his associates are
continuing this strategy of blaming other people, blaming his aides. He
said something about 65,000 state employees might have access to his
stationary. He is making all -- everything is about him. He has been
treated badly. He has been betrayed, rather than getting to the bottom of
what really happened in each of these scandals, and how can we make sure
nothing like this happens again.

SHARPTON: Now, Krystal, this extortion allegation is already bringing out
some ugly talk on the right wing media. Listen to this.

(BEGIN VIDEO CLIP)

RUSH LIMBAUGH, RADIO TALK SHOW HOST: I don`t know. This is tough trying
to figure out which one of these women is lying. One of them has to be.
So the lieutenant governor is blond and the mayor is brunette. Is that
relevant in determining which one of them is telling the truth? I don`t
know. Just asking. The lieutenant governor seems a little bit more at
home with makeup than the mayor. Is there anything to learn from that?
I`m just asking.

(END VIDEO CLIP)

SHARPTON: I mean, he is not exactly sticking up for Christie.

BALL: No.

SHARPTON: And he is not exactly ingratiating himself with women.

BALL: Well, and that is part of the problem here, right? For Christie, he
has always had a bit more trouble appealing to women because of his whole
bullying attitude. In this case you do have, you know, instances where it
is women who are making the accusations, and you`ve seen some ugliness from
Republicans. You had Haley Barbour, former governor is calling the mayor
of Hoboken a, quote, "lady mayor."

WALSH: The lady mayor. As though it`s so weird to have --

BALL: A woman be mayor of a city.

WALSH: Yes. Whoever heard of that?

SHARPTON: Yes, lady mayor. Not mayor, lady mayor.

BALL: Right.

WALSH: Lady mayor. And they wonder why they have problems with women
voters. I don`t get it.

SHARPTON: Yes. But the bottom line here is you`re dealing with some very,
very serious allegations.

BALL: Yes.

SHARPTON: And you`re dealing with them from what we can make of it, no one
that has a motive, even a political motive to make something like this.
And I think that where we thought this was very, very bad is getting worser
and worser, at least it appears to be. We`re going to see. Krystal Ball
and Joan Walsh, thank you both for joining us.

WALSH: Thanks for having us, Rev.

SHARPTON: Ahead, honoring the dream on Martin Luther King Day. His son
Martin Luther King III joins me live on the challenges ahead.

And President Obama speaking personally about race in America. Stay with
us.

(BEGIN VIDEO CLIP)

MARTIN LUTHER KING, JR., (JANUARY, 1929-APRIL, 1968) AFRICAN-AMERICAN CIVIL
RIGHTS: There may be some tear gas ahead.

UNIDENTIFIED MAN: Yes.

KING: I say to you this afternoon that I would rather die on the highways
of Alabama than make a butcher wear my conscience.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

KING: There can be no gain saying the fact that the Negro has been
extremely patient. We have waited for well, now 345 years for our basic
constitutional and God-given rights. And we still confront the fact that
we are at the bottom of the economic ladder.

(END VIDEO CLIP)

SHARPTON: Reverend Dr. Martin Luther King, Jr. Just days before his "I
Have a Dream" speech, calling for economic justice. And on this King Day,
while we come together for service, we remember Dr. King`s fight to extend
the economic ladder to all Americans. Today over 50 years later, many
challenges lie ahead. And while many on both sides of the political aisle
rightly celebrate Dr. King this day, we should not overlook the policies
and positions that are right now keeping his dream from becoming a reality.

Republicans in Congress continue to block an agenda for more fairness at
every turn, raising the minimum wage, extending unemployment benefits,
protecting food stamps. All of this obstruction comes as income inequality
continues to rise. In the past 50 years, the top one percent has seen its
income skyrocket 270 percent while the vast majority of Americans have
barely made any gains. It`s a national disgrace that President Obama`s
tackling head-on.

(BEGIN VIDEO CLIP)

PRES. BARACK OBAMA (D), UNITED STATES: A dangerous and growing inequality
and lack of upward mobility that has jeopardized middle class America`s
basic bargain, that if you work hard, you have a chance to get ahead. I
believe this is the defining challenge of our time. The idea that a child
may never be able to escape that poverty because she lacks a decent
education or health care, or a community that views her future as their
own, that should offend all of us, and it should compel us to action. We
are a better country than this.

(END VIDEO CLIP)

SHARPTON: We are a better country than this. And today, as we remember
Dr. King, we must dedicate ourselves to keeping his dream alive and his
fight moving forward.

Joining me now is Dr. King`s elder son Martin Luther King III, and
Congresswoman Karen Bass. Thank you both for being here to honor Dr. King
with us and his legacy.

REP. KAREN BASS (D), CALIFORNIA: Absolutely.

SHARPTON: Martin, I don`t know anyone that has fought more to keep the
policies and philosophies of your father front and center and not just have
this as a day with just ceremonial things. What is your assessment today?

MARTIN LUTHER KING III, PRESIDENT, KING CENTER: Well, very quickly, one of
the most important issues, we`re approaching an election. We have gone all
over the world to fight for democracy for other nations. And yet right
here at home we are restricting democracy by the new voter laws.

SHARPTON: Right.

KING III: So if dad was here, he would be certainly working with Congress,
trying to get an adequate voting rights bill. He would be working with
Congress, just as the president has said about how do we raise up the
quality of life. The nation will not do well if we continue to keep
creating more and more poor people. There is a better way. Dad would call
it probably redistributing wealth. And that is probably what got him
killed, quite frankly.

SHARPTON: Now, when you look at the income inequality that we talked
about, and when you look at the attack on voter rights, which you call the
march that we all rallied with you last year, a couple 100,000 of us
marched on voter ID and on the economic inequality, there are many data
being hypocritical today, celebrating your father`s birthday, but not being
evasive about what your father stood for.

KING III: Well, that`s absolutely correct. I think many try to make
Martin Luther King relevant to themselves. And yet they come to ceremonies
that are birthdays, but they don`t actually work with the sacrament and do
the work to bring about the change. That can change, but it`s a matter of
participating in the political process. We got to find a way to get more
people to vote than ever before in this upcoming election.

SHARPTON: Now, Congresswoman Bass, as you listen to Martin Luther King
III, Dr. King and -- talking about this, is there a mood in Congress to
deal with this? I know that Congressman Sensenbrenner and Congressman John
Lewis have proposed a voters bill that would in many ways deal with the
Supreme Court decision. And this is what martin and I hoped for last year,
with the march that there be some bill in Congress. But there is no
guarantee that they would even bring it up to vote, let alone pass.

BASS: You know, that`s right, Rev. But actually, I am encouraged. And I
do think it`s going to come up for a vote. I have to tell you that I was
very skeptical. But my colleagues who are my elders, Mr. Conyers, Mr.
Lewis, they told us that they were going to be able to bring Republican
support, and they`ve done exactly that. Now, it`s not the bill we would
have written --

SHARPTON: Right.

BASS: But it is certainly a start. And I actually am hopeful that it`s
going to move and it`s going to move both in the Senate and the House.

SHARPTON: Now, Martin, a lot of younger people, she talked about her
elders and they`re ours too. But then we`re older than some of younger
people that work with all of us. And they don`t understand even today,
this holiday came about after a fight. Your mother had to mobilize all
over this country to even get this holiday. And a lot of young people wake
up today and think this holiday was automatic.

KING III: Well, you`re absolutely correct. We know that nothing comes
without struggle, work.

SHARPTON: Right.

KING III: And the fact that mom, Stevie Wonder, you so, many others around
our nation were working to get this holiday. And it`s wonderful that we
have a holiday. But the holiday is different than what we normally do for
a holiday. The holiday is about rededicating our lives to finishing or
helping to realize the dream. Because we`ve not realized it yet. We just
talked about poverty. Militarism and violence and racism still in our
nation.

SHARPTON: Congresswoman Bass, do you think that America has a sense of
shifting to deal with this problem of income inequality?

BASS: Well, you know, I definitely think the mood is out there. All of
the polling certainly says that there is support for raising the minimum
wage. And obviously, that`s to address income inequality. So I think the
mood is there. But I do think we have to constantly educate people, even
about what the holiday is about. It`s not a holiday to do nothing. It`s a
holiday to rededicate yourself. It`s not a holiday to have a department
store sale. It`s a holiday to reflect on the history of struggle and to
continue to move that forward.

SHARPTON: You know, Martin, you have a daughter, Dr. King and Mrs. King`s
only grandchild is your daughter that he never, of course, got to see. How
does she deal with King Day? I`m getting a little personal. But what does
King Day mean to Dr. King`s granddaughter, and what do you hope it will
mean to her as she grows up?

KING III: Well, I think she is getting more of an understanding. This
year for the first time she watched a cartoon called "Our Friend Martin"
which is a whole experience teaching.

SHARPTON: You wrote a children`s book.

KING III: And I wrote a children`s book. And I`ve read the book to her.
In fact, I`m speaking at her school tomorrow. I want to get back to
Atlanta. And of course she is here in New York, she and my wife are here
in New York with me as well. So they observed the holiday with me. We`re
teaching her so that she understands and appreciates who her grandfather
is. And she does know.

SHARPTON: I remember when the memorial was being dedicated, the monument
to your father, the only one in that area, and you and your wife took your
daughter there. And she, for whatever reason looked at her grandfather and
said I won`t cry, I won`t cry. And you were amaze because she was too
young to even know and understand what was going on.

KING III: It was the most incredible experience because as we walked up,
when we got to the statue, she said, "I`m not going to cry." And I said
Andrea. She said it again. Then she looked up at the statue and she said,
this is awesome. And she is 3-years-old.

SHARPTON: It is awesome, and it`s an awesome day if we don`t forget the
dream that the dreamer stood for. Thank you so much, Martin Luther King
III.

KING III: Thank you.

SHARPTON: Thank you, Congresswoman Karen Bass.

BASS: Thank you.

SHARPTON: Thank you for joining us.

Ahead, history was made five years ago today. Our first black president
was sworn in. Today he is opening up about race. That`s next.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

OBAMA: This is the meaning of our liberty and our creed. Why men and
women and children of every race and every faith can join in celebration
across this magnificent mall. And why a man whose father less than 60
years ago might not have been served at a local restaurant can now stand
before you to take a most sacred oath.

(END VIDEO CLIP)

SHARPTON: Five years ago today, President Obama was inaugurated as the
44th president of the United States and the country`s first black
president. In an interview out today, President Obama reflected on several
issues, including race in America. Quote, "There is no doubt that some
folks who just really dislike me because they don`t like the idea of a
black president. Now, the flip side is that there are some black folks and
maybe some white folks who really like me and give me the benefit of the
doubt precisely because I`m the black president." So we celebrate how far
we`ve come, but also realize a lot of work still is yet to be done.

(COMMERCIAL BREAK)

SHARPTON: Today the first family took part in a community service project
at Central Kitchen in Washington, D.C.

(BEGIN VIDEO CLIP)

OBAMA: We are noting the 25th anniversary of this outstanding institution.
And very proud to be a part of it. And we just want to thank everybody who
is here for all the great work they do.

(END VIDEO CLIP)

SHARPTON: This morning, the National Action Network, my civil rights
organization held our annual Martin Luther King Day breakfast. Vice
President Biden was the guest speaker, and he got specific about a
challenge we must fight.

(BEGIN VIDEO CLIP)

VICE PRES. JOE BIDEN (D), UNITED STATES: I never thought we`d be fighting
the fight again on voting rights. I never believed -- I really didn`t. I
really didn`t. This has been the ultimate fight because our opponents
know, they know the single most dangerous thing to give us is the right to
vote. They know what that is.

(END VIDEO CLIP)

SHARPTON: Dr. King Day ought to be a day that we commit ourselves to
continue to fight. You and I must decide what part we`re going to play,
not in the struggles that have been fought and won, but in today`s
struggle, the fight to keep voting rights, to stop those efforts to
suppress voting rights. The dealing with economic and income inequality.
Let us not act like the civil rights movement was something back then there
is still a civil rights movement needed now, and you and I must help lead
it.

Thanks for watching. I`m Al Sharpton. "HARDBALL" starts right now.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY
BE UPDATED.
END

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