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All In With Chris Hayes, Thursday, February 6th, 2014

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ALL IN with CHRIS HAYES
February 6, 2014

Guests: Gary Peters, Hunter Walker, Julia Ioffe, Masha Gessen, Jeff
Sharlet

CHRIS HAYES, MSNBC HOST: Good evening from New York. I`m Chris Hayes.

Tonight, take a second to think about what a Republican-controlled House
has looked like for this country. Now, imagine what a Republican-
controlled Senate would look like, with Ted Cruz basically calling the
shots.

That is the scary reality Democrats are facing right now. Today, barely 24
hours after Senate Democrats met with the president to talk about strategy,
Democrats are ringing the alarm. Obama`s former campaign manager David
Plouffe tweeted, "Two brothers are attempting to purchase the U.S. Senate.
Voters and candidates just mere chess pieces in this game of self-
interest."

And this is the number that everyone is freaking out about. According to
"The Washington Post," as of this week, Americans for Prosperity, a group
largely funded by the Koch brothers, has spent more than $27 million on ads
since August, nine months away from Election Day.

And $27 million may not seem like a huge number to you, but here`s a little
comparison. So far, the Democratic Senate Majority PAC has spent just
$2.75 million on ads responding to AFP, 1/10 of what AFP has spent. In
2010, AFP spent nearly $40 million total on the midterms. So far, they
have already spent $27 million with 3 quarters of a year to go.

Their goal is very simple: to turn the Senate red.

(BEGIN VIDEO CLIPS)

UNIDENTIFIED FEMALE: Kay Hagan, she just doesn`t get it.

UNIDENTIFIED FEMALE: Tell Senator Landrieu, we deserve better than
Obamacare.

UNIDENTIFIED FEMALE: Call Congressman Peters and tell him Obamacare isn`t
working. It`s hurting Michigan families.

UNIDENTIFIED FEMALE: Obamacare doesn`t work. It just doesn`t work.

UNIDENTIFIED FEMALE: Tell Senator Pryor to stop thinking about politics
and start thinking about people.

(END VIDEO CLIPS)

HAYES: Today, the Senate is just six seats away from turning Republican,
and Democrats are shouting a warning that incumbents and candidates are
already getting absolutely hammered in their local markets. Right now,
there are six open seats meaning a senator`s retiring. Three of those
senators are Democrats in red states, and those are just the open seats.
There`s a handful of vulnerable Democrats like Mary Landrieu of Louisiana
and Kay Hagan of North Carolina.

Americans for Prosperity is going after almost all of them with millions of
Koch dollars in their pocket. They spent a million against Representative
Gary Peters who`s running for retiring Senator Carl Levin`s seat in
Michigan. And today, they announced a $610,000 ad buy against the very
vulnerable Democrat Mark Pryor for his support of Obamacare.

Here`s the problem with the flood of big money. It is going largely
unanswered by Democrats. "The Post" reports AFP has spent over $1.7
million so far on ads just against Senator Mary Landrieu. Senate Majority
PAC spent less than $650,000. Americans for Prosperity has spent $7.2
million, a staggering number, running ads against incumbent Senator Kay
Hagan in North Carolina. Democratic Super PAC has spent only $1.4 million
in her race, less than a quarter of what AFP has spent.

And, yesterday, the Democrats` biggest super PAC, Priorities USA, announced
they would be sitting out midterms. Every year, and every election cycle
since Citizens United, we have seen new frontiers of big money open up. We
have watched donors get increasingly more innovative. In this case early
in how and when they pump money into races.

Now, in 2012, with the Obama fund-raising juggernaut in place, things came
out about even. It does not look like that will happen this year. Picture
emerging nine months out is that organizations funded largely by the Koch
brothers are overwhelming Democrats across the country. They`re trying to
buy this election and they are doing it in plain sight.

Joining me now is Congressman Gary Peters, Democrat from Michigan. He`s
been on the receiving side of some of those ads. Are you surprised by how
much money there has been this early this negative?

REP. GARY PETERS (D), MICHIGAN: There`s no question, Chris. It`s, you
know, it`s unprecedented to have that kind of ad come in against me. We
had over $1 million buy. You`re talking 9 1/2 months from an election.
So, if you`ve got a $1 million buy now, imagine those buys are going to
continue for the next nine months they`re going to continue to get hammered
by these ads, and quite frankly the information they`re putting out is --
well, this complete misinformation and sometimes outright lies and it`s
very difficult to try to counter that unless you have a million dollars,
yourself, to counter it.

HAYES: You know, it occurred to me, I was sitting in my office today
watching ad after ad from Americans for Prosperity, almost all of them
about Obamacare. And a kind of light bulb went off, which is that these
ads had been running around the country actually for two years. I mean,
they spent a bunch of money in 2013. It`s got to be having an effect on
how the law, itself, is being perceived by people. There is so much
negative advertising about the law. Forget candidates attached to it.

PETERS: Yes, that`s exactly right, and as I mentioned, you know, it`s
misinformation about it as well. In fact, on the plane tonight coming back
home here to Michigan, I spoke with a lady who was pretty clear she had
talking points down, but didn`t understand how the law actually helps
people. Once I had an opportunity to explain it to her, she had a
completely different view of it.

It`s difficult for me to have those one-on-one conversations with enough
people when you`ve got multimillion dollar ads putting out misinformation
day after day.

HAYES: In 2012, there`s a lot of alarms being rang on this same issue.
They were coming from David Axelrod and all sorts of folks from around the
Obama campaign. When all was said and done at the end of 2012, the money
came out about even when you totaled all the disclosed money and dark money
and the big -- the big money, super PAC money.

What`s to say this isn`t the same thing here? I mean, this is essentially
fake alarm to try to shake the donor tree?

PETERS: Well, you know, it`s -- the only way we`re going to be able to
combat that is we do need to have smaller donations. We need the people
engaged in the process. Certainly, we know when the president ran, we had
a lot of small donors all across America that was helping out, standing up
to basically two billionaires or handful of billionaires paying for these
ads.

We`re going to need to have that same kind of energy of regular everyday
folks who are going to get up and say, we are not going to let a couple
individuals distort democracy and buy elections. They`re going to have
their voice heard. It`s a $10 contribution, $20 contribution, that adds up
because there are more people out there than there are billionaires.

We`ve got to make sure that that power is exercised.

HAYES: OK. But in the final analysis, wouldn`t you also take a few
Democratic millionaires pouring a bunch of money into a super PAC that
could run ads going after your opponent?

PETERS: Well, you know, certainly that would be great, but I also believe
very intensity that we`ve got to have a democratic system that`s based on
transparency. To me, what is the most important part of all of this is
that we have a transparent government, one that people trust, one that
people respect, and if we just let other billionaires fight it out, then
candidates like myself who are running for the Senate, you know, we`re just
horses with billionaires that are backing one horse or the other.

I don`t want to be part of that process. I want to be part of a process
where everyday Americans have a say in their government and people here in
Michigan have a say as to who`s going to represent them in the United
States Senate. This shouldn`t be out of state billionaires that are
controlling the dialogue. It should be Michiganders that are controlling
the dialogue for the Michigan U.S. Senate seat.

HAYES: You know, it occurs to me that each election we see each campaign -
- we see these innovations. The money actually, the money that we`re
talking about right now isn`t dark money in the sense that we know these
are super PACs that are filing. There is money that is even harder to
trace and track than this money that we have right now and that`s the kind
of iceberg that`s underneath the water of dark money. That`s only going to
grow in this election.

PETERS: Yes, absolutely. It`s going to continue to grow. And, you know,
we`ll see the impact that it has on the midterm. You know, you`re right
talking about a presidential year. You`ve got a lot of people engaged.
You have really high turnout.

It`s a completely different dynamic in the midterm. A lot of folks don`t
show up to vote. And that`s why it is so critical that regular everyday
folks understand it`s important to not just help out candidates with maybe
sending $10, $20 but have to go to the polls.

The one good thing about this system in America, is that even if you`re a
billionaire and have a lot of money, you only get one vote join go into the
ballot booth. We have to have folks coming out.

HAYES: As of now, that`s true. You never know what the Supreme Court is
going to do.

Congressman Gary Peters, thank you so much.

PETERS: Thank you very much.

HAYES: Joining me now, my MSNBC colleague, Karen Finney, host of
"Disrupt", which airs weekends at 4:00 p.m. Eastern, who`s also a former
communications director with the Democratic National Committee.

I should note, we reached out, invited the Koch brothers on the program.
They could not make it. They referred us to Americans for Prosperity.

Do the Democrats -- as I read all this today and saw the Priorities USA,
this is the problem the Democrats face as a political party as an electoral
coalition. They`ve got a midterm problem.

KAREN FINNEY, "DISRUPT" HOST: Yes.

HAYES: Do the Democrats have a midterm problem?

FINNEY: We do. Part of the problem is, you know, the party tends to focus
on presidential elections. The party committees, the Democratic Senatorial
Campaign Committee and Congressional Committee, they`re doing quite well.
Fund-raising is going well.

As you pointed out in the interview, you need massive air cover because
these dark money outside groups are able to spend millions and millions of
dollars just on one race. I mean, they can really take somebody down with
one check basically in a way that is much harder for the inside money.

So I do think that part of the problem, and also remember that groups like
the Kochs, there was a "Forbes" article they talk about. They`re thinking
in terms of decades. Not thinking in terms of this cycle and next cycle,
right?

And that`s the kind of long-term thinking we have to have. And,
unfortunately, I think our party has that with Howard Dean and the 50-state
strategy.

HAYES: That you were part of.

FINNEY: That I was part of, I`ll admit that. And it`s now sort of
dissipated and, again, the idea there is you can`t just focus on every four
years. You`ve got to focus on a permanent campaign.

And that`s been a big part of our problem in terms of the midterms because
people say, all right, we`ll just throw a lot of money at it at the last
minute, rather than if you have been doing the work all year round, you
know where your voters are. You know how to turn those voters out. You
don`t have to just spend a lot of money in the last two weeks to try and
convince the community to come out.

HAYES: So when I read that headline today about Priorities USA, and you`ve
got this fundamental issue which is this kind of campaign in waiting is
being erected. It`s being erected independent of an official campaign
structure because the super PAC vehicle allows you to build a car without a
driver, right?

No one filed to stay I`m running for president, but you can build the
thing. The idea that all this money, organization and donors are going to
go toward that and it`s not going to do midterms, I`m sorry, seems
unconscionable to me from a strategic perspective. Like how is that
defensible?

FINNEY: Well, but the way I could sort of flip that around would be to
say, I mean -- I don`t disagree with you. It`s a little startling. But
when you talk about shaking the donor tree, part of announcing that
publicly is to say to donors --

HAYES: Right.

FINNEY: -- you know, if you`re going to give to the Senate and give to the
House races, here are the other vehicles you have to be giving to. So, I
mean, it does sort of -- as you said in your open, donors are getting a
little freaked out. So, that`s the kind of thing that makes them say, oh,
I better write that check sooner rather than later.

HAYES: Is there a way to combat the kind of big money super PAC spending
we`re going to see in the election in ways other than getting your own
billionaires?

FINNEY: I don`t think so.

HAYES: That`s the honest answer.

FINNEY: I don`t think anybody`s come up with anything yet. I mean, again,
I think the difference being if the party is thinking long term and not
just -- I mean, I`ll give you an example. Howard Dean talked about, hey,
we should be thinking about 2010 because of redistricting. Some of the
folks in the party that thought that was crazy.

Well, guess what? Now, it doesn`t seem to crazy, right? In these
gerrymandered districts. So, the point is we have to get out of the
cyclical thinking to have long-term thinking.

HAYES: And that`s the other thing. I mean, just to stress the stakes here
for people. You know, we saw what happened in 2010 both in redistricting
and in state-level policy. There`s, you know, coal (INAUDIBLE) in river in
North Carolina right now, and it`s not because there`s a Republican
government but there`s a Republican government doing all sorts of such.
They all got swept to power in 2010. That`s going to affect them, not for
a long time.

So, these off-year elections, people saying to themselves, well, you know,
we`ll lose the Senate. If we lose the Senate, how bad is it going to be?
We`ll have the presidency. If there`s one thing we have seen right since
2010 is how much it matters.

FINNEY: Absolutely. One place we`ve seen it, obviously with voting
rights, of course, and also women`s rites. I think that`s part of why
you`re seeing women energized and engaged because in terms of women`s
rights, we`re talking vaginal probes, we`re talking all kinds of
restrictions on our rights and our freedoms. The things that could have
the most impact on your daily life can be happening at the state level.

So, absolutely paying attention to those elections, it`s hard because we
have low voter turnout in this country, anyway.

HAYES: The center left coalition in this country, this is the biggest nut
to crack for some kind of, you know, permanent sort of governing majority
is getting over that.

FINNEY: But I think it`s understanding what we`re really up against. We
are up against a permanent well-funded campaign on the right that is very
strategic. If you look at the places where they`re spending money, they
know exactly why they`re spending that money and how to spend it and what
the message needs to be.

HAYES: Karen Finney, thanks so much. You can catch her on "DISRUPT" on
the weekends at 4:00 p.m., right here on MSNBC.

All right. There`s a new development today in the Chris Christie bridge-
gate scandal that might help answer the most fundamental question: why it
was time for some traffic problems in Fort Lee? The reporter who dug up
some documents will be with us, ahead.

(COMMERCIAL BREAK)

HAYES: We got a new possible clue today in the ongoing mystery at the
center of all of Chris Christie`s troubles. The mystery is this: Why did
his administration decide to cause a traffic nightmare by shutting down
lanes on the George Washington Bridge for four days in September? Why did
his then-deputy chief of staff Bridget Anne Kelly write an e-mail saying
"time for traffic problems in Fort Lee", and why did his administration
unconvincingly claim it was simply conducting a traffic study?

We still don`t know the answers to the questions and Chris Christie claims
he doesn`t know, either.

(BEGIN VIDEO CLIP)

GOV. CHRIS CHRISTIE (R), NEW JERSEY: What I`m curious about is what
happened here. And that`s why I`ve authorized an internal investigation,
as I talked about on January 9th.

And we`ve hired a law firm to come in and do that internal investigation.
They`re working really hard. They`re working diligently, and I can`t wait
for them to be finished so I can get the full story here.

(END VIDEO CLIP)

HAYES: Remember, soon after all this went down, Fort Lee Mayor Mark
Sokolich reached out to a top Christie appointee at the Port Authority
asking for assurance the recent traffic debacle was not punitive in nature.
There`s growing speculation at the time the lanes were closed to get back
at Sokolich, a Democrat, for not endorsing Christie for re-election. That
theory was never entirely satisfying.

(BEGIN VIDEO CLIP)

MAYOR MARK SOKOLICH (D), FORT LEE, NJ: Who would close down lanes to the
busiest bridge in the world to get to me? First of all, I never viewed
myself as being that important. The governor, himself, said I`m not on his
radar nor am I in his rolodex. So, I`m thinking, how could this be?

(END VIDEO CLIP)

HAYES: One theory floated to what the motive is, not to directly punished
Mark Sokolich, is that it had something to do with the single biggest thing
that`s happening in Fort Lee right now, this planned billion-dollar
development called Hudson lights. It`s a location at the base of the
George Washington Bridge is a huge part of the reason it`s so valuable.
Without clear access to the bridge, Hudson lights risks being downgraded
from billion-dollar development to -- well, just another big plot of land
in New Jersey.

In other words, if you wanted to screw Fort Lee or the developers or Mark
Sokolich or God knows who, one really good way to do that is mess with the
traffic. We don`t know if that`s what happened. It`s a mystery that only
the Christie folks can solve.

But a nice piece of enterprise reporting by "Talking Points Memo" via a
public records request found there was a meeting about precisely this issue
between the mayor, Mark Sokolich, and someone from the Port Authority. The
person that Sokolich says he met with was this guy, Bill Baroni, who is
Christie`s top appointee in the Port Authority until he resigned in the
wake of the scandal.

The name should ring a bell. Baroni ordered "There be no public discourse"
over what went down in the wake of the lane closures. He`s the guy who
testified in November about the lane closures ostensibly being part of a
traffic study.

He is also crucially and importantly one of the people involved in the
scandal who is turning over documents and not pleading the Fifth.

Joining me now is the "Talking Points Memo" reporter who uncovered this new
detail, Hunter Walker.

Hunter, while you go for this record, what are you trying to find out here?

HUNTER WALKER, TALKING POINTS MEMO: Well, you know, as you said before, we
really don`t know what was at the root of these lanes being shut down.
And, you know, Brian Murphy and Steve Kornacki both on this network and our
Web site put forth this theory that, you know, if you follow the money, the
biggest most expensive thing at the end of this bridge is this billion-
dollar development.

So, you know, we requested the planning board documents that were the
minutes of the meetings involved in the approval of this development to get
a sense of what had happened in that process and see what might be in
there.

HAYES: What`s amazing here is you`ve got a billion-dollar development,
this unbelievably valuable parcel of land they`ve been trying to develop
for 25, 30 years. It has this amazing sordid history in which they was --
the mafia tried to develop it and paid a half a million dollar bribe to
former mayor of Fort Lee who turned it down. Then, it was bought by Leona
Hemsley (ph).

I mean, this thing has been around, right? All of its value depends, its
whole selling point, and the developer is in the newspaper on the day they
break ground saying you could be in Manhattan in 15 minutes. It all
depends on how many access lanes Fort Lee has to that bridge.

WALKER: Absolutely. I mean, one thing we definitely saw in these
documents is that, you know, the question of bridge access and traffic was
absolutely central to whether or not this development would be approved and
whether it would be successful for the residents. You know, one of the
planning board members referred to as, quote/unquote, "dumping traffic
right on to the bridge." And these three lanes that were shut down were
the subject of a study conducted by the developers.

HAYES: An actual study.

WALKER: Yes, an actual --

(LAUGHTER)

WALKER: So, you know, as you said before, we don`t know, you know, who
would have been the target of an attempt to sort of hijack this
development. You know, was it an attempt to shake down the developers?
There`s two developers involved in this 15-acre parcel. There`s multiple
financiers. There`s the mayor.

So, again, we still don`t know -- but, you know, this development could
have been put at risk by traffic.

HAYES: One of the things I think that`s underappreciated here is that the
so-called traffic study that was only shut down because the head of the
Port Authority appointed by Andrew Cuomo on the New York side, Patrick
Foye, shut it down once he heard about it and sent an angry e-mail. And,
in fact, in the e-mail traffic what you get from Wildstein, I believe
Baroni, definitely Wildstein, is we`re trying to reverse it, trying to keep
it shut down.

Meaning, it is unclear how long they intended this to go. It`s possible
they were going put the thumb on the scale and keep it there as long as
they could.

WALKER: And the reason Steve Kornacki and Brian Murphy first started
pointing at this was the financing for the development. It was actually
approved in 2012, the preliminary plan. But the financing was being locked
up right as these closures were happening.

So, it seems a very sensitive moment in the project.

HAYES: You`ve got four people that have lost their jobs over this or had
ties severed. Bill Stepien, former campaign manager. You`ve got Bridget
Anne Kelly, who is, of course, deputy chief of staff. You`ve got David
Wildstein who had a sort of nondescript job at the Port Authority as the
eyes and ears of Christie and you got Baroni.

Significantly, Stepien and Bridget Kelly has pleaded the Fifth, not turning
over documents. Wildstein turned over documents, basically says, I`ll talk
if you give me immunity.

What significance do you think has Bill Baroni who hasn`t said much, and we
haven`t heard from him since he gave that testimony, is actually turning
over documents?

WALKER: Well, you know, as you said, Bill Baroni is the guy who initially
said this was part of a traffic study. So, he`s really one of the very,
very interesting figures here. And he was also involved in the e-mail
traffic both about retaliating after the New York side re-opened the lanes
and also about the order to close the lanes in the first place. So, one of
the most significant things in this document was it shows that meeting
between Sokolich and Baroni which "A", sort of gives the lie to the traffic
study explanation.

HAYES: Yes, exactly. There was a traffic study. He knew exactly what the
situation was.

WALKER: The meeting they had was talking about strategies to reduce
traffic.

HAYES: Right.

WALKER: So what Sokolich told me is, you know, you look at the discussion
we had, and there`s no way he could have thought that shutting those lanes
would be anything but a disaster for Fort Lee.

HAYES: Hunter Walker from "Talking Points Memo" -- thanks so much.

WALKER: Thank you.

HAYES: All right. What do you get when you mix corruption and a seaside
resort? Athletes at the top of their game, and -- well, these cute little
guys. We`ll tell you the answer, coming up.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: On this vote, the yeas are 58, the nays are 40, 3/5
of the senators duly chosen and sworn have not voted in the affirmative.
And the motion is not agreed to.

(END VIDEO CLIP)

HAYES: Today, in another shameful moment, the United States Senate failed
for the third time to pass an extension of unemployment benefits for the
long-term unemployed. People cut off from benefits by Republican
obstruction since three days after Christmas. They`re now nearly six weeks
without assistance. The measure would have extended those benefits for 1.7
million Americans for three months.

Senate Majority Leader Harry Reid talked about the individual workers that
are behind that statistic.

(BEGIN VIDEO CLIP)

SEN. HARRY REID (D-NV), MAJORITY LEADER: I have my Republican colleagues
to think about the woman from Nevada, 57 years old. She`s couch surfing,
going around to friends` homes, apartments, and sleeping on their couch, 57
years old, worked from the time she was 18 years old. She`s lost her job.
She can`t find a job. She`s a long-term unemployed.

(END VIDEO CLIP)

HAYES: The measure needed 60 votes to pass because Republicans filibuster
everything, so it needed five Republican votes and it got four of them.
Senator Kelly Ayotte of New Hampshire, Senator Susan Collins of Maine, Dean
Heller of Nevada, and Senator Lisa Murkowski of Alaska.

It did not get the vote of Senator Rob Portman of Ohio. Portman had
previously said he was open to it if there was offsets. That is if the
bill didn`t increase the deficit.

Guess what? Today`s bill had offsets. The $6.4 billion was paid for by
pension smoothing which allows companies to bring pensions up to date which
means more revenue and more tax collection. Bill would have excluded any
claimant who earned $1 million or more in the previous year.

So, this bill, as written, would have added zero to the deficit and Senator
Portman voted against it. Today, Senator Portman`s office provided a
statement which reads in part, "With record numbers of long-term unemployed
workers, I worked with my colleagues to try to find a common sense way
forward to pay for a three-month extension of emergency unemployment
benefits while reforms were put in place to better meet the needs of those
who can`t find a job.

Unfortunately, majority leader Reid went ahead with his own proposal and we
ended up back where we started despite our best efforts to find a common
sense solution. I support an alternative to pay for a three-month
extension that actually included a provision that Majority Leader Reid
introduced him and was in President Obama`s budget.

Senator Reid since abandoned the idea altogether and would not allow a vote
as an amendment. He introduced his own offset proposal that put taxpayers
at risk." mark kirk, a state with 80,000 long-term unemployed, voted
against it, too. Tweeting "I would have supported unemployment benefits
extension if $6.4 billion was paid for with common sense offsets instead of
political gimmicks."

These statements are an illustration of fiscal politics in the United
States now and as star back as I can remember which is that when people say
they`re doing something because of the deficit, they are lying to you.
Always, full stop, Republican/Democrat, Liberal/conservative, everyone in
between. No one cares about the deficit. No one cares about the debt. No
one votes on the deficit and no one votes on the debt. What they do is use
the words to stand in for the things they like or don`t like. How do you
know this?

Look at the House of Representatives which is so concerned about the
deficit they are sitting on a Senate immigration bill. The CBO says would
reduce the deficit by $197 billion over the 2014 to 2023 period. And by
roughly $700 billion over the next decade after that! Or go back to 2010
and the tea party revolt. The American people, the story goes, disgusted
with Washington`s spending ways rose up, elected a republican house to send
a message, we don`t want to end up like Greece.

But in the lame duck session, immediately after that election, after
America has sent its message, Republicans and Democrats got together and
what did they do? They agreed to continue the bush-era tax cuts for two
and extend unemployment benefits for 13 months at a cost of $858 billion
added to the debt. And then everybody went back to talking about the
deficit.

So, long-term unemployed in Ohio, in Illinois, in you are watching, ask
yourself if Senator Rob Portman and Senator Mark Kirk really voted against
extending unemployment benefits because they didn`t like the pay for.
Because they`re concerned about the deficit or if they voted against you
for some other reason, maybe they think you`re lazy or shouldn`t be helped
or some other reason which we cannot possibly discern. Who knows why,
really? But make no mistake it had nothing to do with the deficit.

(COMMERCIAL BREAK)

HAYES: A few months ago we showed you tape of an extremely upsetting thing
that is happening in Vladimir Putin`s Russia in which anti-gay quasi
fascist thugs lure them, beat them up, intimidate them and post videos
online to humiliate and out the folks to their friends and family. I`m
going to show you the tape again, now. The reason we showed that to you is
because the social victimization and marginalization of gay people in
Russia which is legal is becoming a key issue as Russia positioned itself
for a spot on the world stage as host of this year`s winter Olympics.
Well, the games are here. The world is watching and things for gay folks
in Russia are just as bad as ever. We`ll take you inside Putin`s world,
next.

(COMMERCIAL BREAK)

HAYES: Until very recently, the Russian town of Sochi was probably not on
many people`s tourist maps. Well, $51 billion later, it`s on everyone`s
map. Vladimir Putin may end up regretting it.

(BEGIN VIDEO CLIP)

PRESIDENT VLADIMIR PUTIN, RUSSIA: Dear friends, ladies and gentlemen. Let
me declare that 126 session of the International Olympic Committee open.
Thank you.

HAYES (voice-over): These are the Putin Olympics. The games in Sochi,
Russia, designed to showcase a leader in command of his people. Putin
spent years lobbying to win the games for Russia and now the country has
spent a record $51 billion making it the most expensive Olympics ever.
That`s 2.5 percent of Russian GDP.

In the U.S., that would mean spending $400 billion on the Olympics or as
one Dutch newspaper illustrates with this graphic, the Sochi games will
cost more than all the modern winter games combined. The $265 million for
a ski jumping venue, six times more than the original estimate.

The $371 million for an amusement park locals call Putin world. It`s not
yet finished. The $8.7 billion with a "b" for a rail link project awarded
to the state rail company, Run, by a Putin pal.

As the "New York Times" put it`s a curious mix of grandiosity and bungling.
The first time the Olympics are being held on the edge of a war zone, pair
of creepy toilets thrown in for good measure. In the meantime,
preparations continue. There was word that Russian authorities have hired
a pest control firm to exterminate thousands of stray dogs around Sochi.

As local animal rights workers tell "The New York times," many of these
strays were pets abandoned by families whose homes were demolished to make
way for the Olympic venues. These are not the kinds of reports Vladimir
Putin wants to get out because Vladimir Putin wants everyone to know this
is not your father`s Russia. No, this is a new kind of Russia. Strength,
stability, modernity, athleticism and sophistication, this is Vladimir
Putin`s Russia, and everyone in the world will know it.

All eyes on Putin means the world is also paying attention to his policies.
Putin has embarked on a campaign of social stigma and legal crackdown on
gays and lesbians, ushering a spate of anti-gay measures including one that
bans so-called gay propaganda. That prompted a global reaction earning
condemnation from world leaders including the American president who is not
attending the games, sending a delegation of gay athletes to attend in his
place. But the anti-gay laws are just part of the collapse of modern gay
Russia

Blasphemy is now illegal. Civil society isn`t just coming undone, it`s
imploding. This is Vladimir Putin`s moment. He fought hard to be on the
world stage. The problem with being on the world stage is that now
everyone is watching.

(END VIDEOTAPE)

HAYES: Joining me now from Russia, Julia Ioffe, senior editor at "The New
Republic" where she`s covering this story. My first question, Julia, how
are the Olympics being received in Russia, themselves? I mean, are people
excited about it? Is it a big victory for Putin? Is there an upwelling of
national pride?

All right, it appears that our feed is not working there with Julia Ioffe.
What we might do is take a break and see if we can get that sorted out and
come right back. We`ll be talking about the Olympics in Putin`s Russia
right after this break.

(COMMERCIAL BREAK)

HAYES: We`re back. We have the "New Republic`s" Julia Ioffe in Russia.
The technical problem appears to be fixed. How are Russians viewing the
Olympics? Is this a big point of national pride? Is there a kind of
upwelling of national pride that the games are there?

JULIA IOFFE, "THE NEW REPUBLIC": I think it`s not so much an upwelling of
national pride, it`s, like, there`s a holdover from the soviet period of we
have to do well, we`re an athletic nation, we traditionally do well. In
this sense, the Vancouver Olympics were a huge washout for Russia. They
didn`t take nearly as many medals home as they wanted to. People were, I
mean, cab drivers, your average man on the street was actually really,
really upset about it in a way that I didn`t expect.

HAYES: So you wrote today something I thought was really caught my eye.
There have been all of these tweets and kind of mocking photos of Sochi and
the hotels being not ready and water in glasses that looks dirty. You said
"it does seem like the western press is on the hunt for evidence of how
inept and hilarious the Russians are. There does seem to be something mean
spirited in all of this. There`s a fine line between fair criticism and
Schadenfreude and the western press has been on the side of the ladder."

IOFFE: I think, I`ve been tracking this, a lot of these tweets coming out
of there. I think everybody figured that things wouldn`t be ready on time.
They`re often not ready on time. Pretty much anywhere the Olympics are
held. It`s a huge thing to pull off, and the Russians aren`t really great
logistical planners. The tone with which a lot of this is done is a little
bit over the top. And I found that Russians here in Moscow who are
actually openly critical of the government who didn`t want the Olympic
Games here, who think it`s a huge waste of money, are a little bit
offended. They`re like, you guys are really happy about these upside down
toilet seats, why?

HAYES: Do you think that the presence of the Olympics has been part in
parcel of the Putin crackdown that you`ve documented so well in the "New
Republic" cover story which is out right now which I would want everybody
to read? What relationship is there between Putin`s actions and having
these Olympics?

IOFFE: I mean, this is part of his vanity project. He put his personal
image at stake here. He learned an English speech which for him is kind of
unheard of. He wants to do things on Russia`s terms, generally. This is
part of what his idea of Russia is. He definitely sees himself as a
national leader. As somebody who restored Russia to greatness on the
international stage, who restored its economy, who brought back political
stability, which some people confused with, you know, who some people say
is stagnation and a tightening of the screws and outright repression.

He sees this as, like, you see a lot of his buddies and his running with
the Olympic torch yesterday, or today in New York. You see this is his
party. He clearly sees these $51 billion as his money to spend for
whatever he wants. He wanted to throw a pretty big party to show the world
that Russia`s back and Russia`s important and Russia should be respected.

HAYES: It seems that the presence of the Olympics spotlighted a bunch of
policies, not the least of which is the raft of anti-LGBT legislation, but
strained the U.S./Russian relationship where you have the U.S., the
president not going. He`s sending this delegation of openly gay athletes,
a Russian official tweeting out a link of a hacked phone conversation of
American diplomats talking about Ukraine. Things do seem to be quite bad
between the two countries at precisely this moment.

IOFFE: That`s right, but they`ve been getting bad for a couple of years
now. This is just you have Ambassador McCall leaving. In some ways it`s
because his family he have been hunted for the entire time he`s been here
for the two-year stint he`s been in Moscow, have been hunted and harassed
by Kremlin Stooges, essentially.

His wife finally had enough of it and went to the U.S. and him being pulled
out of Moscow seems to be kind of a signal from the White House, you know,
he`s quite close to President Obama. It seems to be a signal to Moscow
saying, like, you`re not a priority anymore, and we`re just going to have,
you know, a faceless diplomat as ambassador. You`re not at the top of the
list anymore. You`re impossible to work with.

HAYES: Julia Ioffe from the "New Republic" lives from Russia. Thank you
so much. Really appreciate it. Enjoy the games.

IOFFE: Thanks for having me.

HAYES: We`re going to have more on this story ahead. I`ll talk to two
other journalists who have done incredible behind-the-scenes reporting on
what it is to be gay in Putin`s Russia, what Sochi Olympics mean for that
country. So stay with us.

(COMMERCIAL BREAK)

HAYES: Joining me now journalist, Masha Gessen, author of the books "Words
Will Break Cement: The Passion of Pussy Riot" and the "Man Without A Face,
The Unlikely Rise of Vladimir Putin" and Jeff Charlotte, English professor
at Dartmouth College, contributor to "GG" where he wrote a phenomenal piece
about what it`s like to be gay in Russia right now.

It`s absolute 1000 percent must read. Masha, you wrote a biography of
Vladimir Putin, which is an incredible read, great book. Why did Putin
want these Olympics so badly? What is it about what he is doing to Russia
as the Russian leader that made getting this such an unbelievable priority
for him?

MASHA GESSEN, JOURNALIST: When he became president, he wanted one of his
great ambitions was to become one of the guys, to show that Russia was
great again and that he was one of the world`s leaders. What a better way
to prove it than to have all the guys come over for a big party to his
favorite place, which is Sochi where he loves to downhill ski? But also
Russia had suffered a disgrace during the 1980 boycott of the Soviet
Olympics.

HAYES: Right, remember, that 1980 is when the U.S. boycotted the games.
They were in Russia and it was kind of half Olympics because the U.S.
wasn`t there and it`s sort of an asterisk next to those.

GESSEN: Right, and the U.S. and several other countries --

HAYES: Right.

GESSEN: I believe boycotted the Olympics in response to Russia`s invading
Afghanistan. This was Russia`s answer to everything. Through the
humiliation the Soviet Union suffered, the 1980s, the mess of the 1990s.
Now Vladimir Putin resurrected Russia and almost restored the Soviet Union
and finally held the Olympics and everybody came.

HAYES: Jeff, you write about gay life in Russia at this moment. When you
went to Russia to do this reporting, what were your expectations and what
surprised you about what you found about the reality of gay life there
right now under Putin?

JEFF SHARLET, GQ CONTRIBUTOR: I think what was really surprising was the
pervasiveness of the fear and the perversity of the law, gay propaganda
law. You know, one of the items in the law is this idea that same-sex
couple can`t say that their relationship is equal to a heterosexual
relationship. And so it`s almost as if they`re outlawing love. You see,
practically speaking, everyone I spoke to, people were going back into the
closet, people had been living happily out lives, people who were forced to
flee to keep their families intact. And it was a very, very dark cloud
that really sort of hovered over every aspect of LGBT life that I
encountered.

HAYES: I remember in the Beijing Olympics that became a real flashpoint
for the policy of the Chinese government. Remember the Olympic torch was
essentially chased after by protesters. And there was a feeling among a
lot of folks I talked to, Chinese experts and Chinese folks that this was
unfair, that essentially china was being singled out. What do you say to
people that say all of this attention on Russia`s gay laws in the run-up to
the Olympics or Putin is essentially unfair, that you`re singling out
Russia when there are tons of countries that persecute LGBT folks?

GESSEN: Well, just because someone else is abusing someone else doesn`t
mean that abusing is right. I mean, I don`t really understand that
argument at all. But to the point, do you remember what happened after the
Beijing Olympics? How the world forgot about China? How China reinstated
the death penalty which it repealed in advance of the Olympics? How china
cracked down and nobody noticed? That`s what`s going to happen here,
except I think worse.

HAYES: So you actually think there`s this kind of pause as Russia is so
clearly in the world spotlight and as soon as everyone packed up and has
gone home, the crackdown will continue and worsen?

GESSEN: I think it will intensify. Putin feels his main concessions,
because he actually released high-profile political prisoners, Pussy riot
among them. Low-profile political prisoners have been getting harsh
sentences as the preparation for the Olympics continue. I think it will
still lash out after the games are over. Believing the eyes of the world
is no longer on him.

HAYES: Jeff, one of the things that comes through in your article and is
the most upsetting about chronicling what has happened in Russia is "a" the
fact things have moved backwards but "b" this combination of thuggish
Vigilantism with Tacit state support. What you`re seeing are people,
citizens, stoning and beating up while the government looks the other way.

SHARLET: Yes, you know, there`s Babushkas who gather stones to throw.
There`s one demonstration where there was a priest blessing stones before
they were thrown. On the video, you can see the police smiling. That
reflects a national trinity that hate has three faces in Russia right now
and the state is the mind and the Russian Orthodox Church, unfortunately,
traded its integrity for access to power and has become the heart of this
hate. You have these fringe thugs who are the hands, the fists that they
do so; they are in effect enforcing the law.

SHARLET: Putin has moved very close to the Orthodox Church. Pussy riot
who you have a book out about, they`re now in the states, they played a
concert last night, their great crime was having a protest moment in the
most sacred cathedral in the Orthodox Church. Why has that the
relationship intensified between Putin and the church?

GASSEN: You know, that`s a very difficult thing to unpack. I`m not sure
there`s a distinction. They both come from the same. The Russian Orthodox
Church always served at the pleasure of the state. During the soviet
period, Russian clergy serviced to KGB. Orthodox clergy have not changed.
They`re the same people. The head of the Russian Orthodox Church, the
patriarch who lobbied Putin, come from the same corporation. They`re both
from the KGB. They`re colleagues.

HAYES: Right. Jeff, what is the future for the folks you talk to on the
ground there? Are they planning to flee? Are they going underground?
What are they doing?

SHARLET: They`re going underground. They`re planning to flee. I spent a
night having dinner with one family, two lesbians and their son. And their
dinner they were out a year ago. Now they`re closeted at work. They`re
making arrangements. Every night they get together at dinner and talk
about their research about where they can hide. I didn`t speak to anyone
who wasn`t at least considering emigration or new lives to tell their co-
workers to hide things.

HAYES: Journalist Masha Giessen and "GG" contributor, Jeff Sharlet. "THE
RACHEL MADDOW" show begins now. Good evening, Rachel.

RACHEL MADDOW: That was fascinating stuff.

END


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