updated 2/28/2014 11:04:13 AM ET 2014-02-28T16:04:13

ALL IN with CHRIS HAYES
February 27, 2014

Guests: Tara Dowdell, Heather Haddon, Josh Miller, Lou Allstadt, Imani
Perry, Damon Hewitt, Jelani Cobb

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

And today is officially day one of rabbi-gate. Thanks to David
Wildstein, the man who "The Bergen Record" once called Governor Chris
Christie`s eyes and ears inside the Port Authority -- the man who said he
got it when Christie`s deputy chief of staff Bridget Kelly said it was time
for some traffic problems in Fort Lee.

We now know the traffic jam wasn`t the only one on the table. In 15
pages of newly unredacted documents provided by Wildstein and released
today by the New Jersey legislature, this guy, Rabbi Mendy Carlebach of
South Brunswick Township, a chaplain for the Port Authority police
department, pops in Wildstein and Kelly`s communication.

Wildstein first sent a photo with the rabbi with House Majority John
Boehner, later declaring the rabbi "has officially pissed me off." Kelly
replies, "Clearly. We cannot cause traffic problems in front of his house,
can we?" Wildstein reposts, "Flights to Tel Aviv all mysteriously
delayed."

For his part, the rabbi said he doesn`t have a clue why that exchange
happened.

Now, the good news tonight for Governor Chris Christie is that the
newly unredacted documents don`t implicate him in any way. The bad news is
that David Samson, Christie`s top appointee at the Port Authority, is
grabbing new fire from across the river.

(BEGIN VIDEOTAPE)

PATRICK FOYE, PORT AUTHORITY DIRECTOR: I believe then and I believe
now, obviously given the multiplicity of law enforcement investigations
underway, there is some serious question, that there was a question of
violation of federal and state laws --

HAYES (voice-over): Patrick Foye, the director of the Port Authority,
launched an all out war on David Samson, the Port Authority chairman. Foye
says Samson lacks the moral authority to be in charged of the multibillion
dollar agency.

Governor Chris Christie begs to differ.

RADIO HOST: Do you still stand by Samson as your appointee?

GOV. CHRIS CHRISTIE (R), NEW JERSEY: Strongly. Firmly. And I
disagree with Pat Foye.

HAYES: Christie has had no problem throwing long time employees under
the bus, from his deputy chief of staff, to his former campaign manager, to
his eyes and ears inside the Port Authority, they`re all gone. But
Christie is standing firmly behind Samson.

You see, Samson is not just a random appointee. In 2012, he was
called the second most powerful man in New Jersey politics. He has worked
under four governors, Democrats and Republicans. He was the attorney
general of New Jersey. His legal career spans decades as the founding
member of Wolff and Samson law firm.

David Samson and Chris Christie go way back. He was Christie`s
campaign counsel during his run for governor and then led his transition
team. And on inauguration day in 2010, Samson was there.

DAVID SAMSON, PORT AUTHORITY OFFICIAL: My name is David Samson. And
over the past two weeks, I`ve been privileged to serve as chairman of the
governor-elect`s transition committee.

HAYES: Next, Christie made Samson his top appointee at the Port
Authority. Samson continued his work for his law firm and he and Christie
stayed close. When Christie had a walk-through of the RNC in 2012, Samson
was there. When Christie was campaigning again last year, Samson was
there.

And when bridge-gate broke, Christie stood by his man.

CHRISTIE: I sat and met for two hours yesterday with Mr. Samson,
General Samson. And I`m confident that he had no knowledge of this.

HAYES: But two months after Christie made those comments, the
allegations of Samson`s conflicts of interests just keep rolling in. His
firm represents the owner of the Railroad Construction Company Inc. They
have won almost $16 million worth of contract work from the Port Authority
since Samson became the chairman of the Port Authority. Some of those
contracts Samson voted on.

Mr. Samson took public role in promoting and defending a deal for the
Port Authority to take over operations of the Atlantic City airport. A
deal that could ultimately lead to a lucrative purchase or lease agreement
with the owner.

But Samson`s firm was representing that same owner of the airport.
Samson recused himself from discussions and votes on the issue.

Samson`s firm also represented the Rockefeller group who is looking to
develop property on a piece of land in Hoboken.

Two months after he nominated Samson as chairman but before he was
confirmed, the Port Authority paid $75,000 to commission a study on
potential development. It took three years to complete the report. When
it came back in January 2013, the study found of the 19 blocks it looked
at, only the three blocks owned by Samson`s client were fit for
redevelopment.

Rockefeller Group has since dismissed Wolff Samson.

So, forget for a moment traffic problems in Fort Lee, forget
bridgegate, and ask, why does David Samson still have a job?

(END VIDEOTAPE)

HAYES: We`ve reached out for comment from the law firm Wolff and
Samson, and did not receive a response. We were also unable to reach David
Samson at his office in Port Authority.

I should correct one thing. I said John Boehner is House majority
leader. He is of course the speaker of the House.

Joining me now is political consultant Tara Dowdell, used to work as a
senior manager at that same Port Authority.

There is a bunch to get through here. But here`s the most significant
thing. We talk about the conflicts of interest in a second.

It always seemed to me that the person who holds Chris Christie`s fate
in his hands, the person who could really let the flood gates open is
Patrick Foye, but he`s got no loyalty to that governor. He is appointed on
the New York side. He is the person who blew the whistle when he first
found out about the entire traffic problems issue.

And now, he is coming out and saying -- this is a big deal. He is
saying the chair of the Port Authority, that he in some sense is kind of
reports to, does not have the moral authority to lead the organization.
That is a declaration of war.

TARA DOWDELL, POLITICAL CONSULTANT: Yes, and a very damning
statement.

And I will say this, just for context for people watching, there has
always been a tension between New York and New Jersey at the Port
Authority. Particularly at the upper echelons between the chairman, the
executive director and that tension is about what you got to in your
opening, it`s about resources, it`s about who controlled what resources.
That`s at the root of that tension.

And so, when you get into these different ties which is going to be
very problematic for David Samson, these ties between him and developers
and different clients and them getting resources, contracts, opportunities
from the Port Authority. That`s problematic.

HAYES: OK. So, here`s -- there is an old Michael Kinsley statement.
The scandal isn`t what`s illegal. It`s what`s legal, right? It strikes me
here -- this in broad daylight has been the case. David Samson is a close
ally of Governor Christie. He helps him win elections. He is rewarded
with being pointed the chair of the Port Authority.

At the same time he gets to stay at his law firm where he is a named
partner and -- oh, look, that law firm happens to represent tons of people
that are trying to do deals that the Port Authority can help them with.
That in and of itself, just right there, forget the traffic problems in
Fort Lee. That is a massive conflict of interest. You`re talking about an
$8 billion authority.

DOWDELL: Exactly. And the reason why people want to be the chair of
the Port Authority is because of the amount of resources that it controls.
When I was in the governor`s office, I held the position of director of
appointments. So, my office made appointments to the Port Authority board.

And I can tell you only the very closest, most supportive, most
powerful person that is in the governor`s circle gets that appointment.
That is the plum in the state of New Jersey for any powerful business
person.

And so, I will actually add, you said that you think Patrick Foye
holds Governor Christie`s fate in his hands. I would argue that David
Samson holds Governor Christie`s fate in his hands.

HAYES: And that is the point. And the reason that we have seen, I
would speculate here, or I would at least suggest as a possible theory of
why certain people have been cast out -- their relationships, despite the
fact that Samson is mentioned in the e-mails, despite the fact that Samson,
quote, "is helping to us retaliate," is a statement that is made at one
point in the emails, about pulling Samson to a fight with New York over
traffic closing. That David Samson has not been cast aside, has not been
severed ties to, that the governor standing with them, because if he were,
David Samson could really harm the governor.

DOWDELL: Absolutely. And here`s the other problem for Governor
Christie. David is actually very well-respected. He was the attorney --
and full disclosure -- he was the attorney general when I was in the
governor`s office.

HAYES: Yes.

DOWDELL: He is respected by both Democrats and Republicans. And so,
if he is going on push someone like him aside, there is going to be
blowback, you know, of a major scale in addition to it, we don`t know what
David Samson knows.

HAYES: Political consultant, Tara Dowdell, thank you so much.

DOWDELL: Thank you.

HAYES: All right. There`s developing news on yet another unsolved
New Jersey mystery. It is one we`ve been following very closely and I want
to get to the bottom of it.

So, here`s the thing. Why did the state part ways with its single
largest Sandy relief contractor? It is a question Sandy victims have asked
Chris Christie himself.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Why was HGI fired? Why did you pay him $50
million and why did you privatize most -- why did you privatize most of the
grant program? You didn`t have to do that.

GOV. CHRIS CHRISTIE (R), NEW JERSEY: I just disagree with you.

(END VIDEO CLIP)

HAYES: HGI, that gentleman was talking about was the contractor that
was tasked with overseeing New Jersey`s nearly billion-dollar post-Sandy
housing programs. Now in December, the state quietly signed a settlement
ending the contract with the Louisiana-based contractor. But they didn`t
bother to announce it until more than six weeks later. In fact, a state
official who was addressing the homeowner concerns about the building
process that HGI was overseeing during an assembly hearing didn`t even
bother to mention that the contract with HGI was ending.

When it finally was revealed the state was ending the contract, state
official initially would not say why, it was ending or who was taking over
oversight of the housing programs. Eventually, earlier this month, a state
official said that HGI services were not needed.

And now, the folks at the advocacy group Fair Share Housing and the
"Wall Street Journal" have turned up some documents indicating that there
were, quote, "performance-related issues" that led the state to cancel the
contract. The new documents also show that within seven months of getting
the contract, HGI billed the state nearly $52 million which was amounts to
76 percent of what they were supposed to be paid for the entire three-year
contract.

HGI says the state still owes them more than $18 million of the $52
million total and is trying to collect. That is $18 million of relief
funding passed by taxpayers, meant to help victims of Superstorm Sandy
rebuild their homes.

Joining me now is Heather Haddon, who has been covering this story for
the "Wall Street Journal."

Heather, this is a mystery. Is it fair to say that the state`s story
about the termination of this contract has changed over time?

HEATHER HADDON, WALL STREET JOURNAL: Well, it is certainly them being
able to speak about it has changed over time. Like you mentioned, in
December, they alluded to there were some performance issues with this
contractor, but they didn`t say outright they had been terminated.

HAYES: They also made a case, and they made it directly to us in
statements, in which they said -- well, it turns out we didn`t need them,
that we can handle all this work in house. They were not saying we`re
firing them.

HADDON: Right. They were saying that we`ve moved on and the whole
recovery process. We can do a better job in doing this in-house. We can
train front line staff better to be more personable and we`re moving on
from HGI.

Now, these documents were really illuminating. It is the first time
we`ve gotten a sense of the dispute between both parties. We have not
heard before HGI`s side of the story.

So, they are saying they were asked to do much more work than they
were contracted for and at a much quicker pace.

Now, the other interesting thing about this document, it seem there
were some verbal agreement between state and HGI about being able to pay
for all this work. It said that they were --

HAYES: Don`t worry about it. Do this and we`ll find the money.

HADDON: Right. So, it seemed they would be paid all this, the $50
million, and like you said, they had only gone through seven months of the
contract. And then --

HAYES: That`s a lot of money.

HADDON: Right. When it came time, the state had some dispute over
it.

HAYES: Right. So there is an $18 million outstanding.

Other part of context is there had been a lot of criticisms of the way
HGI, which was managing one of the biggest programs for rebuilding was
managing it, right?

HADDON: Right, right. And the state is starting to acknowledge that
there were performance issues. I thought it was really interesting. There
was a hearing on Monday where the DCI commissioner testified about this and
a prominent Republican on the committee criticized HGI for poor
performance.

So, that does seem to indicate that the administration and the
Republicans are acknowledging that HGI did a bad job in running this and
need to start acknowledging it more vocally than they ever did before.

HAYES: And it always struck me as change, it turns out that these
contractors were fired six weeks ago. It always struck me as odd that if
you were confronted with a government contractor taking care of a very
politically sensitive and important function for your constituents, and
they were doing a bad job, why you would be just say, they`re doing a bad
job. We are firing them and take the political credit for it.

HADDON: State officials in response to that question have said they
don`t publicize every time they terminate a contractor.

HAYES: Heather Haddon from "The Wall Street Journal" -- thank you so
much.

HADDON: Thank you.

HAYES: Up next, I`ll talk to one of the representatives in Arkansas
who is trying to repeal the state`s Medicaid expansion. He also happens to
be a Medicaid beneficiary.


(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I`m nervous. Not going to lie about it. This is
a big decision.

(END VIDEO CLIP)

HAYES: He joins me next. Stick around.

(COMMERCIAL BREAK)

HAYES: This is what happened in Washington, D.C. just a few hours
ago.

(BEGIN VIDEO CLIP

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: If I can persuade, you
know, Sharpton and O`Reilly to be in the same meeting, then it means there
are people of good faith who want to get some stuff done, even if we don`t
agree on everything.

(END VIDEO CLIP)

HAYES: What brought those two men into the White House today, ahead.

(COMMERCIAL BREAK)

HAYES: Right now in a state of Arkansas, a small group of ultra
conservative Republicans are threatening to roll back an expansion of
Medicaid under the Affordable Care Act that has provided health insurance
for about 100,000 people in Arkansas. The state passed the Medicaid
expansion last year with bipartisan support, thanks to a compromise called
the private option in which federal money is used to purchase private
insurance plans for those who would qualify for the Medicaid expansion.

That compromise made Arkansas one of the very few states in the South
to accept the federal Medicaid money and expand insurance for low income
residents.

Now, the private option still has support for members of both parties.
But in Arkansas, it takes 75 out of 100 House votes to pass the bill that
will authorize funding for it and this time around, supporters don`t have
the votes. After multiple attempts to pass the bill failed, the 27
Republicans blocking passage sent a letter of the House speaker declaring
an impasse has occurred and requesting a meeting to discuss a way forward.

These lawmakers aren`t just threatening to take health care away from
100,000 people who now have it. They`re actually blocking the bill that
funds the state`s entire Medicaid program.

One of these lawmakers, one of the people blocking the bill because he
wants to block the Medicaid expansion is this guy. State Representative
Josh Miller and he has a pretty amazing story.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Not only is he a young politician, he is also a
quadriplegic. Miller admits a car accident with a friend involving alcohol
put him in this chair.

STATE REP. JOSH MILLER (R), ARKANSAS: We`re just very fortunate they
dragged two boys with heartbeats up out of that ravine.

(END VIDEO CLIP)

HAYES: Nearly a decade after that accident, Josh Miller was elected
to the Arkansas House.

And joining me now is Arkansas State Representative Josh Miller.

And, Representative, thank you for joining me only the. The first
question is, as I look at this situation play out, why would you try to
take 100,000 people off health insurance they already have?

MILLER: Well, thank you for having me, Chris.

And number one, I would like to clarify that nobody in our group is
wanting to take 100,000 people off of this coverage that currently exists.
We simply want to slow down the enrollment process and move at a more
responsible way, moving forward, so that we have an opportunity to come
back in the next legislative session next year and better mold this program
for several reasons.

HAYES: But that`s a bit of a change from where the position was
initially. I mean, you were one of the people that voted against this
expansion to begin with. When the impasse over this bill started, the
demand, all the reporting suggests the demand coming from your caucus was
actually to get rid of the private option. That`s pretty documented.

MILLER: Well, I don`t think -- I don`t think we understand that that
is not likely to happen. What we would like to see is a compromise reached
where we can move forward, where those of us who will return next year have
an opportunity to study hard facts and hard numbers and move forward.

We have in Arkansas, unlike Washington, D.C., and I`m very proud of
this fact. We have what`s called the Revenue Stabilization Act which by
law forces the state of Arkansas to have a balanced budget. In the year
2017, Arkansas will have to start picking up our portion of the cost of
this expansion.

HAYES: That`s only 5 percent, right?

MILLER: It is in 2017. But the bottom line is, when I took office at
the beginning of 2013, we had a Medicaid program in our state that was
currently in the red. We were taking steps to fix that.

But the bottom line is even if it is 5 percent, 3 percent or 10
percent, which quickly goes to 10 percent, the bottom line is the money
isn`t there. We`ve got to have a way to figure out how to get that money
before we can move forward.

HAYES: Representative, the private option is projected, as of now,
according to best projections, to save the state about $670 million over
the next decade.

MILLER: Well, those numbers are -- those numbers are very debatable,
Chris. I think would you find other numbers that would indicate otherwise.
The bottom line is, in 2017, we have to start picking up the cost as a
state.

We`re going to be faced with three options. Either kicking the folks
off the program who have signed up in good faith, and that is a horrible
option. Raising taxes, that`s another bad option. Or three would be
cutting much needed -- much needed other services that our state provides.

HAYES: Representative, I have to ask you this. I read about your
story which is really remarkable, and what you were able to do in the midst
of that accident. But it is the case, right? When that accident happened,
it was very expensive. About $1 million as I understand the medical bills.
And that the Medicaid program itself picked up a significant portion of
that, isn`t that right?

MILLER: That is correct, Chris.

And I would like to take this opportunity to humbly thank the American
people and the people of Arkansas for helping me out, because without those
programs, I know that I wouldn`t be here. That`s one of the reasons that
I`ve dedicated my life to public service as an opportunity to help out my
community.

I would also like -- I would like to note that the Medicaid program
that was there for me, and has been there for thousands and thousands of
other Arkansans, the traditional Medicaid program is not what`s being
debated here in Arkansas. As a matter of fact, one of the biggest reasons
that I`ve been fundamentally opposed to the private option plan is because
I don`t want to take a chance on, in three years, traditional Medicaid for
those who are most needy, those who have catastrophic accidents and so
forth, to have some of those traditional Medicaid services cut.

HAYES: But there`s 100,000 people who -- this is an expansion just a
little bit above what the qualifications were before. There`s 100,000
people who are now getting insurance they couldn`t have before. These
people are not wealthy. These are people 133 percent of the federal
poverty line, right?

I mean, take a listen to one woman who is now getting Parkinson`s
treatment who is on this Medicaid expansion.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Mary Frances Perkins says she is just starting to
get the proper treatment for her Parkinson`s and cannot imagine losing
ground.

MARY FRANCES PERKINS: It would just be a nightmare. It would be -- I
would feel like my government had absolutely turned their back on me.

(END VIDEO CLIP)

HAYES: So why is not she deserving of that same kind of social
contract?

MILLER: Chris, I believe that this woman may be. I don`t know her
personally and I don`t know her situation. Again, I will say that we have
laid proposals on the table here in the state of Arkansas that would allow
-- that would not end this program for the 100,000 people that are signed
up.

As a matter of fact, they would continue and we would come back in
2015 after we`ve had a year to study the facts, to study the hard numbers.
And right now, we`re being asked to gamble with the taxpayers money and we
have a nation that is already $17 trillion in debt. And the state of
Arkansas does not need to go down that same path. And we can`t by law. So
we`re just trying to take, we`re trying to take a responsible look at how
we best move forward.

I don`t think there`s anybody in the Arkansas legislature that wants
to deny somebody health care. But the bottom line is --

HAYES: That was not the case --

MILLER: -- we`ve got to be able to pay for it.

HAYES: Representative, that was not the case when you and some of
them voted against the Medicaid expansion last year and when you started
objecting to this bill. I hope you guys can find common ground because the
whole nation is watching right, hoping you guys figure it out.

Arkansas Representative Josh Miller, I really do appreciate you coming
on tonight. Thank you very much.

MILLER: Thank you, Chris.

HAYES: I remember the CEO of ExxonMobil who opposed a water tower
that could be used for fracking in his own backyard, but seemed fine with
it elsewhere?

(BEGIN VIDEO CLIP)

REX TILLERSON, EXXONMOBIL CEO: A million wells, you can find where
most of them are. Go out and talk to people. If there was a problem,
state regulators would have already been all over this.

(END VIDEO CLIP)

HAYES: The response from one of the former top executives at the
Mobil part of ExxonMobil, next.

(COMMERCIAL BREAK)

HAYES: On Monday, we brought you the story of the aggressively pro-
fracking CEO of ExxonMobil who is now suing to keep potential fracking
paraphernalia away from his mansion.

(BEGIN VIDEOTAPE)

HAYES (voice-over): The lawsuit argues the tower, which would be used
for fracking, would create a noise nuisance and traffic hazards.

You may recognize the suit`s lead plaintiff, former House Majority
Leader and noted environmentalist Dick Armey. You see, Armey and Tillerson
are just concerned about the value of their luxury properties worth
multiple millions of dollars.

(END VIDEOTAPE)

HAYES: It`s a story whose hypocrisy is so acute, it has taken off
online. It was top of Reddit Politics for two days. There is a petition
pledging to support Tillerson in his effort if he would return the favor.
"But we need your help to protect people everywhere from fracking, not just
your backyard."

There`s also been some backtracking. "This is not an anti-fracking
lawsuit," Michael Whitten, the lawyer representing the plaintiff said.
"Nothing could be further from the truth."

Lloyd Hanson, the controller of Cross Timbers Water Supply
Corporation, said the new tower, water tower is needed to meet growing
residential and commercial demand in the area, as opposed to increased
water needs of all the nearby fracking wells.

But Rex Tillerson shouldn`t feel so lonely, because there is another
member of the ExxonMobil family who is also fighting fracking.

Lou Allstadt, our next guest, the former executive vice president and
operating officer for exploration and production in the U.S., Canada and
Latin America for the Mobil Oil Corporation, a man who worked for
ExxonMobil six months after that merger, he has written an open letter to
Rex Tillerson saying, in effect, you go, girl.

Allstadt now lives in Upstate New York. He writes: "For the past five
years, I have been actively trying to keep your company and the rest of the
industry from fracking here. You and I love the places where we live, but
in the end, if they are ruined by fracking or frack water tanks, we can
afford to go someplace else. However, many people can`t afford to move
away when they can no longer drink the water or breathe the air because
they are too close to one of your well pads or compressor stations."

We asked Rex Tillerson to be our guest or provide a comment. Mr.
Tillerson`s lawyer has declined to provide a comment or offer Mr. Tillerson
as a guest, and nothing further was forthcoming after another request
today.

But an ExxonMobil spokesman told Reuters: "Mr. Tillerson does not
object to the tower for its potential use for water and gas operations for
fracking."

Lou Allstadt, former executive vice president of Mobil Oil Company,
joins me now from Utica, New York.

So, Lou, I think the thing that we all get about this Tillerson case,
it`s a classic NIMBYism, not in my backyard. But I want to turn that
around on you and say, well, we -- we generally look askew at NIMBY
activism. Right? There are certain things that have to be built and
property owners don`t want them built around them. Isn`t all fracking --
anti-fracking protesting, including yours, just NIMBYism run amok?

LOU ALLSTADT, FORMER EXECUTIVE VICE PRESIDENT, MOBIL OIL CORPORATION:
I think some people could look at and it say that. I think other people
take a broader view of it and say that continued reliance on fossil fuels
is a serious problem, and that it is having major climate effects, and that
we really need to start switching to alternatives.

HAYES: You worked for this industry for 30 years. At what point did
you come to see this?

ALLSTADT: Well, I had actually retired.

I was retired, wasn`t going to anything more in oil and gas. And
about five years ago, people who knew that I had worked in the industry
asked me what I thought about drilling wells close to the lake that draws
drinking water for Cooperstown, where I live.

And I said, well, that`s silly, that no one would put a well that
close. And when I started looking into it, I realized that the New York
State regulations, even if you thought it was worth getting the gas out,
those regulations were just woefully inadequate, allowing wells very close
to people`s homes, allowing disposal of cuttings, all sorts of things.

HAYES: You also say in your letter, in your open letter, say, "These
issues are legitimate." You`re talking about some of the concerns about
water and noise.

You say: "These issues are legitimate, but they are localized. I am
now much more concerned with the greenhouse gas impacts of fossil fuels
generally, particularly the huge impact of methane emissions from natural
gas production and transportation. These are global problems that local
zoning cannot protect against. Only a major shift towards renewable energy
sources can begin to mitigate their catastrophic climate impact."

Do you think folks like Tillerson and folks inside the oil industry
that you spent your entire adult career in, do they recognize what they are
doing to the climate?

ALLSTADT: I think they have started to since the early 2000s.

I think that`s when people started seriously worrying about it. It
was just barely coming to the surface when I was still working before 2000.
But it has clearly become more and more obvious. More and more scientists,
97 percent of climate scientists say that global warming is a real issue
and that we have to do something about it.

And one piece of evidence that the companies do know that it is a
problem is that many large energy companies and large energy consumers have
started building an assumed carbon tax into their economic projections. So
they`re actually recognizing it internally and, at the same time, denying
it externally.

HAYES: What do you want to see Rex Tillerson in this tremendously
powerful position do, and not just the lawsuit about the water tower, but
as the head of Exxon?

ALLSTADT: Well, one thing he could do -- and I think the water tower
is something that just precipitated this conversation.

But one thing that he could do is actually openly acknowledge the fact
that something has to be done to change and shift away from fossil fuels
and to actually support some kind of a carbon fee, carbon tax that would
help push us in that direction.

HAYES: Lou Allstadt, former executive vice president of Mobil Oil
Company, thanks so much for your time.

ALLSTADT: Thank you.

HAYES: Up next: what government spies managed to pick up by spying on
Webcams. Here`s a hint. Just what do you think people use Webcams for?
That`s ahead.

(COMMERCIAL BREAK)

HAYES: Do you remember a few years back this crazy story about a
school that gave students laptops and was then accused of turning on those
computers` Webcams remotely without informing the kids or parents?

Eventually, the school confronted a student, producing a photo of him
in his room with what looked like drugs. The FBI got involved. Parents
and students alike were outraged, and a settlement was eventually reached.

And I can think of a no more invasive, intimate way of spying on
people than by using their Webcams. Well, it turns out the British version
of the NSA known as GCHQ has been doing something not too different to
millions of people, with help from our very own NSA.

Spencer Ackerman reporting in "The Guardian" that, beginning in 2008,
GCHQ conducted a wide-reaching surveillance program known as Optic Nerve
that targeted Yahoo! Webcam chats, saving images to agency databases,
regardless of whether individual users were suspected of any wrongdoing.

And you will never guess what they found. Basically -- and I`m
overstating here just slightly -- people use Webcams for two things, to
talk to their grandkids, as my parents do with my toddler, and, in the
words of GCHQ, to show intimate parts of their body to the other person,
and, shockingly, broadcasting pornography.

In fact, there were such vast quantities of -- quote -- "undesirable
nudity," the British surveillance agency struggled to store all of it and
keep it away from the prying eyes of their staffers. And they were shocked
by this, calling the sheer numbers of people who did this surprising.

And what could an intelligence agency want with all of those faces?
Well, automated facial recognition, monitoring existing suspects and
discovering new ones.

Does a database of people`s faces captured under no suspicion and
acquired by hacking a third-party business strike you as a massive
violation of the most basic and universal right to privacy? It sure does
to me. I would venture it would to anyone who found out they were on the
wrong side of it too.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I made bad choices. I
got high, without always thinking about the harm that it could do. I
didn`t always take school as seriously as I should have. I made excuses.

Sometimes, I sold myself short.

And the only difference is that I grew up in an environment that was a
little bit more forgiving.

(END VIDEO CLIP)

HAYES: That was the president today in the East Room of the White
House being quite frank and personal about his past, before announcing a
new initiative that aims to help the millions of young would-be Barack
Obamas around the country.

Speaking to a packed room that included the parents of Trayvon Martin,
our own Al Sharpton, to Bill O`Reilly, the president described his My
Brother`s Keeper initiative, in which he will be pushing nonprofit
foundations to pledge $200 million over the next five years to help young
help of color overcome the profound effects of poverty, unemployment and
racism, so they can meet their full potential.

And the president made his case for the initiative in terms of how it
stood to benefit not just the boys and young men in question, but the
nation as a whole.

(BEGIN VIDEO CLIP)

BARACK OBAMA: The fact that too many of them are falling by the
wayside, dropping out, unemployed, involved in negative behavior, going to
jail, being profiled, this is a moral issue for our country.

Cycles of hopelessness breeds violence and mistrust, and our country`s
a little less than what we know it can be.

So, we need to change the statistics, not just for the sake of the
young men and boys, but for the sake of America`s future.

(END VIDEO CLIP)

HAYES: For most of his five-plus years in office, the president has
strenuously and studiously avoided framing any of his policies or proposing
any initiatives that specifically targeted black America and people of
color.

For that reason, today felt like a real breakthrough. Here was the
first black president with black boys behind him talking about the brute
fact that life for them in America is more difficult.

The question now is, will what the president announced today succeed
in making it easier?

Joining me from Washington, D.C., Damon Hewitt, senior adviser with
the U.S. Programs division Of Open Society Foundations. He was at the
launch of the president`s initiative today and is participating in its
implementation. And here with me in New York, Jelani Cobb, associate
professor of history, director of the Institute for African-American
Studies at the University of Connecticut, and Imani Perry, professor of
African-American studies at Princeton, author of "Prophets of the Hood:
Politics and Poetics in Hip Hop."

Damon, you were in the room today. What was it like to be there?

DAMON HEWITT, OPEN SOCIETY FOUNDATIONS: Well, Chris, thanks for
having me again.

There were so many emotions. And having had a chance to be in that
room, it felt different. It felt different from any other time we have had
this kind of audience with President Obama or anyone in the Cabinet or in
the White House. It felt different.

I think folks were generally eager, eager to get to work to take
advantage of the moment. They were hopeful that we can finally drive some
real transformative change, not just talk about the issues, but start to
not just lift up young men individually, but start to break down of these
systemic barriers and obstacles that keep them down and stand in their way.

And, also, people felt appreciated. I think the young men in the room
felt appreciated. I hope that young men of color around the country felt
like finally someone is speaking for them, speaking directly to them, and
hopefully walking with them on what I hope will be an incredibly long
journey to make sure that we actually drive real change in this country.

HAYES: It is interesting you talk about some of the systemic factors,
because I want to talk a little bit about where on the spectrum of
solutions to the problems that young men of color face, kind of targeted
pilot programs, which seem to me a really good idea to try to experiment
with different kinds of interventions that would help and empower people,
and then broader systemic things, like if we had -- for instance, here`s
the unemployment rate.

Right now for young people in this country between 16 and 19 years
old, black, 38 percent, white, 17.5 percent, so that is a big problem to
begin with, before we get to anything else.

But before we get to this kind of solution, I want to sort of talk to
you, all three, about the kind of rhetoric here and the embedded premises,
right, because at one level, you want to say, the fact of the matter in
American life is that young men of color are disproportionately likely to
be X, Y and Z, enmeshed in the criminal justice system, poor, unemployed,
right?

All these things are true as sort of empirical statements. At the
same time you`re doing, you don`t want to then go ahead and reinforce all
the stereotypes about young men of color that play a role in producing
precisely those statistics. Right?

JELANI COBB, UNIVERSITY OF CONNECTICUT: Right, because when we have
that conversation, we never say that young people of color are also less
likely to binge-drink than their white counterparts.

We don`t have the conversation saying that young men of color are more
likely to be entrepreneurs than their white counterparts. We don`t look at
this in the full totality of the spectrum. You understand why, because you
want to generate sympathy and you want to generate a sentiment that people
will say, we need to summon our moral courage and our resources in order to
address these things.

But it is difficult to look at it and say, OK, what are we really --
who are we really talking about, and is the humanity of these young people
being missed in the conversation?

IMANI PERRY, PROFESSOR OF AFRICAN-AMERICAN STUDIES, PRINCETON
UNIVERSITY: Yes.

I`m actually quite concerned with the conversation that focuses on
kind of personal and moral responsibility and failings as the cause for the
deep inequality that confront African-American boys in particular and young
men. I think we know that there`s lots of areas where there is actually
systematic and structural and persistent inequality, right, in employment,
in housing, in incarceration, all these sorts of areas where we can look
quite explicitly at practices that lead, social practices that lead to
inequality.

HAYES: So, the president has had these exchanges about precisely
this. Right? Ta-Nehisi Coates wrote a piece criticizing him, and then he
kind of responded to Ta-Nehisi Coates through the person of David Remnick
in an interview he gave to "The New Yorker," basically saying, people get
on my case because I talk about personal responsibility. But I do of
course also talk about structural obstacles. And it is both/and, so why
are you giving me a hard time?

PERRY: Right. Because philanthropy is not policy. Right?

And this is about -- this is a philanthropic endeavor, which might
have some particularly good outcomes for individuals. But when -- the
critique is really about the absence of policy, which is what we need to
address these kind of pervasive...

(CROSSTALK)

HAYES: All right, Damon, I want -- you exist in a world of
philanthropy, which Imani just called not policy.

I want to get your response to this and talk about what you think can
come out of this.

HEWITT: Right. Right.

HAYES: I also want to talk about some incredible statistics about
black fathers that I think will tweak or turn around a lot of people`s
conceptions right after this break.

(COMMERCIAL BREAK)

HAYES: We`re back with Damon Hewitt, Jelani Cobb, and Imani Perry.

And, Damon, before we went to break, we kind of zeroed in on this
question about kind of the structural factors, the structural economic
factors and racial factors that play a role in the difficulties young men
of color face, and how you overcome them through kind of small, targeted
policy interventions.

You have been working, right, in your capacity in philanthropy to look
at pilot programs. What`s your feeling about that?

HEWITT: Well, first, let`s just say, I`m actually new to
philanthropy. I spent most of my career as a civil rights attorney.

And so I made a living, really my life`s cause, to break down those
barriers, and that`s still what I`m doing now with philanthropy. And
really people have to understand that today`s foundations are bringing us
campaigns like the Campaign for Black Male Achievement at Open Society
Foundations throughout the country, the Black Male Engagement program based
in Miami, but nationwide, the Sons and Brothers Initiative out of
California, and Forward Promise from the Robert Wood Johnson Foundation.

So, we know that there is a lot of action-oriented work that
philanthropy is moving. It is not just moving dollars around. And we`re
happy to see that there is now alignment. There have been small victories
in some places, but we`re looking for big gains, transformative change.

I know that colleagues in philanthropy and in the civil rights
community, the human rights community won`t settle for anything else.
Simply talking about the issues isn`t sufficient. What we`re trying to do
is to build a long-term game plan.

We know it won`t happen in 90 days or maybe in nine years, but we know
over a longer-term game plan, we can start to do things like not just
change the images we see in the media and in film, but also address the
deep psychological and historical factors that lead folks to devalue or
just to not value the humanity of black people, of brown people.

And so we want to lift up our brothers, our sons, our fathers, our
cousins in ways that simply haven`t been done before on the national stage.

COBB: So, I agree with Damon`s point. I think what the president is
doing is good. And I will go on the record and say that is good, right?

HAYES: Yes.

(CROSSTALK)

COBB: But it is also not sufficient.

HAYES: Right.

COBB: And what we`re understanding is that...

HAYES: I don`t think he would say it is, just to...

(CROSSTALK)

COBB: I don`t think that he would say that.

But what happens at the end of this? So, we produce more young black
men who are college graduates. That`s great. But we also have a higher
unemployment rate for black college graduates than we do for white college
graduates. And we produce more black people who are professionals. We
also have a higher unemployment rate for black professionals than we do --
a black college graduate has an on-average lifetime income of a white
school graduate.

And so some of these issues are structural issues.

HAYES: Say that sentence again, because that`s an important sentence.

COBB: Right.

A black college graduate has an on average the same lifetime earnings
as a white school graduate.

And so these the issues that we`re actually talking about. And so I
don`t want -- what we`re actually looking at is the limits of the Obama
presidency.

(CROSSTALK)

HAYES: Or the limits any presidency, I would hasten to add.

COBB: Well, no, because we had the Marshall Plan. And we understand
what the Marshall Plan did in Europe after World War II.

Or we have even the war on poverty or the New Deal.

PERRY: Here`s my concern, because this is not the war on poverty or
the New Deal in terms of scale.

And what happens often with public-private partnerships, particularly
when they`re directed toward communities of color, is that, if they fail,
then the argument becomes, see, we tried to help them and it didn`t work.

And it really is not a matter of a failure to actually try and take
hold of opportunity, but that the deeper structural issues can`t simply be
addressed by pilot programs. Right?

(CROSSTALK)

HAYES: Let me play White House lawyer here for a second. OK?

PERRY: OK.

HAYES: So you`re going to go, OK, we can`t even get government to
stay open.

So go over to Capitol Hill and say, fellows, great idea here. Let`s
get about, I don`t know, $50 billion together for sustained interventions
in helping young black men. Like, no way, that`s not happening. That`s
not on the table. We can`t even keep the government open.

(CROSSTALK)

HAYES: So, like, this is seizing an opportunity that is a possible
opportunity to seize to shed some light and to coordinate some private
activity.

PERRY: Look, that may be the case, but at the very least, we need to
tell the truth about it.

And I think that there is -- there is a problem when we pretend as
though this is something that is going to be hugely transformative. It is
wonderful if it helps a critical mass of young men and boys. But we ought
to still put -- bring pressure to bear on the question of policy
interventions that could transform the lives in a kind of more
comprehensive fashion.

HAYES: Damon.

HEWITT: Right. And I agree with that.

That`s exactly what philanthropy is doing and what civil rights and
human rights advocates are in this for. Look, the My Brother`s Keeper
initiative, as an administration initiative, merely last during this
presidency. But the important thing to realize is that a lot of this work
has been happening in communities for a very long time.

A lot of it has been funded by philanthropy and been engaged in by
brothers, sisters, everyone on the ground for a very long time. So, we
want to catapult the work forward, not just cabin it to three years.

HAYES: Damon Hewitt with Open Society Foundations, Professor Jelani
Cobb, Professor Imani Perry, thank you so much.

I teased a key statistic about the amount of time that black men spend
with their children as fathers. We will put that on our Web site,
ALLIN.MSNBC.com. I think you might be surprised by these statistics.

That`s ALL IN for this evening.

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

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