updated 3/11/2014 11:12:14 AM ET 2014-03-11T15:12:14

ALL IN with CHRIS HAYES
March 10, 2014

Guest: Greg Feith, Jess McIntosh, Dan Dicker, Michael Grynbaum, Brian
Jones, James Merriman


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

Three days since it first disappeared, there is still no trace tonight of
the missing Malaysian Airlines Flight MH-370. The mystery has only
deepened and the apparent tragedy is serving as a reminder that even in
this hyper-connected age, it is still possible for a jumbo jet to vanish
from the night sky without a trace.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: This plane was flying from Kuala Lumpur to Beijing on
an early Saturday morning flight local time. Two hours into the flight,
Malaysia Airlines says it lost contact with the plane.

HAYES (voice-over): The mystery of Malaysia Airlines Flight MH-370 has
only deepened since it was first reported missing 72 hours ago.

Here`s what we know: the flight from Kuala Lumpur to Beijing carrying 227
passengers and 12 crew members lost contact with ground control over the
Gulf of Thailand less than two hours after takeoff. The airplane was a
Boeing model 777, one of the safest and most widely used jets in the world,
with the potential to stay in the air for up to 16 hours.

Beyond that, everything else is a mystery.

UNIDENTIFIED MALE: If it suddenly broke up in flight, the debris could be
spread over a massive area. But what could have happened? The
possibilities include a calamitous mechanical malfunction, a structural
failure, even a bomb.

HAYES: Over the weekend, clue after tantalizing clue led only to dead
ends. Oil slicks near where the plane vanished on Saturday were found not
to have come from the missing flight. What was thought to be a life raft
floating in the Gulf of Thailand turned out to be the lid of a large box.
And what looked like the tail of an aircraft was actually just logs tied
together.

UNIDENTIFIED MALE: Without being able to locate the aircraft or parts of
the aircraft we are unable to determine the cause or the causes of this
incident.

HAYES: Heightening the mystery is the fact that two men boarded the flight
using passports stolen from European nationals in 2012 and 2013. Police
said their tickets were both purchased by an Iranian man known to them only
as Mr. Ali.

UNIDENTIFIED MALE: They each booked one-way flights to Europe through
Beijing. The question, were they criminals, terrorists or simply trying to
get past immigration?

HAYES: For the families of those onboard, the past 72 hours have been
filled with rage, panic, and frustration.

UNIDENTIFIED MALE (through translator): The last time I heard from my son,
he called before the flight to say he`d be home around 9:00 a.m.

UNIDENTIFIED FEMALE (through translator): My grandparents were on the
plane, and they`re nearly 80 years old, she says. We don`t have much hope.

HAYES: The last time a jet disappeared over the ocean was in 2009 when Air
France flight 447 from Rio de Janeiro to Paris crashed into the Atlantic
Ocean killing everyone on board. And while it took three years to
determine the cause of that tragedy, debris from the crash was discovered
the day after the flight disappeared.

But despite shallow waters and calm weather, there is still no sign of the
Malaysia Airlines flight, prompting one official to call the situation an
unprecedented mystery and leaving relatives of those onboard clinging to
the steadily vanishing hope that all is not lost.

(END VIDEOTAPE)

HAYES: Malaysian officials today said they are expanding the search area
to cover a region hundreds of miles from where their aircraft disappeared.
Military ships and aircraft from more than half a dozen countries are now
engaged in the search, including two U.S. warships.

Joining me now, former NTSB investigator, Greg Feith.

Greg, I think for a people watching this, the big question is, how is it
possible in this day and age for an airline to disappear out of thin air?

GREG FEITH, FORMER NTSB INVESTIGATOR: It is hard to imagine, Chris, but in
that part of the world, radar coverage is very scant and parts of it is
unavailable. And so, pilots are reporting their process across certain
tracks to ATC. And if you have an airplane that falls below what little
radar coverage there is, then there`s really nothing that can track their
exact flight progress or track across the ground. That`s the hard part for
investigators right now.

HAYES: Now, my understanding is the transponder that would essentially
indicate where the flight was stopped working about an hour after the
flight, which we think is possibly an hour before total contact was lost.

Does that give any indication to what happened, or could that just be a
separate mechanical failure?

FEITH: That`s what investigators are going to look at. They`re going to
want to see where that exact transponder failure occurred and whether or
not there was actual radar coverage in that particular area because the
transponder provides a discreet code. It provides altitude information and
ground speed.

If the rest of the radar data after that is just what we call a skin paint
where you`re not getting an actual altitude, you`re just getting a track of
the airplane until radar coverage is gone or lost, that will tell
investigators whether or not there may have been an electrical problem with
the airplane.

HAYES: You were one of the investigators on that Air France 747 flight,
the story of which and how it went down is the most awful stories ever, and
we won`t get into the details of pilot error that ultimately brought that
down.

But in that case, you had altitude data, right? I mean, we knew that
flight had plummeted into the water. The mystery was why.

What do you do as an investigator when you don`t even have that? Where do
you start on something like that?

FEITH: Well, that investigation was handled by the French, and what we had
in that particular event was the Airbus has a similar system to every other
modern airplane, and that is, it can provide downloaded data bursts, giving
a health check of the airplane.

So, there was some limited data, some data that was being provided by the
airplane in these data bursts that investigators had to analyze early on in
the investigation.

When they lost radar information, they -- again, they had to go out and
search for the wreckage that was on the surface of the ocean to really find
what the exact location of the aircraft accident was and then backtrack
because all of those parts drifted well over 70 miles. So they had to do
some plotting and searching to find the main wreckage point underneath the
ocean at about 15,000 feet.

HAYES: Let me ask you this. And I don`t want to suggest the answer to
this, but I want to ask it because people on the Internet are asking it.

Basically, do you feel like we`re getting the whole story? I mean, is it
possible we`re being told everything that`s known by investigators, it
simply is the case this is a mystery to all involved, or is there some part
of you that`s skeptical that some information is being held back at this
point?

FEITH: Unlike here in the United States where we try to be very
transparent, the NTSB provides a lot of information early on as they know
it. The rest of the world doesn`t work like that nor are they required to
work like that. And I have a feeling thing that there is some information
that is guarded and it should be guarded because it needs to be vetted. It
needs to be validated before they put this information out for public
consumption.

You have family members that are hanging on every word, and if you`re wrong
this early in the investigative process, you could jeopardize the
credibility of the entire investigation.

So, there`s a level of caution with the words that are coming out. We
don`t know everything but, again, I think at some point we eventually will.

HAYES: Former NTSB investigator Greg Feith -- Greg, thanks for your time
tonight.

FEITH: You`re welcome.

HAYES: Joining me now, MSNBC counterterrorism, cyber security and national
security analyst, Michael Leiter.

OK. The two stolen passports. So, you read that, and you firstly think,
whoa, whoa, whoa, whoa, whoa, something is up here. And then the second
the second thought I had, well, I don`t know how common if you picked a
flight at random in that part of the world or any part of the world, you
would scratch the surface and find stolen passports onboard. So, what`s
your answer to that?

MICHAEL LEITER, MSNBC NATIONAL SECURITY ANALYST: The answer is it happens
a lot more than people think it would be. There`s a big market for stolen
passports in this reason a lot of reasons. A lot of criminal reasons,
human trafficking, drugs.

But having two stolen passports on the same flight, that is certainly
uncommon. Is it 10 percent of the time, 15 percent of the time? Hard to
say. But it`s certainly not the norm.

HAYES: OK. So, it is not the norm, it is not the case, oh, actually turns
out if you were to stop a flight at random that you would get a number like
that. This is something that someone who has some experience investigating
this kind of thing says -- well, wait a second, what`s going on here?

LEITER: Absolutely. I think for the counterterrorism community and the
intelligence community, as soon as you have a plane that disappears from
radar, that`s already unusual. People take some notice.

But the intelligence community and the counterterrorism folks, once they
heard about the stolen passports, that definitely got their attention in a
different way.

HAYES: Now, as of now, there has been no claims of credit or I guess
credible claims of credit that we`ve seen so far. It does seem to me that
in other instances in which there was some kind of terrorist action, often
it`s motivated as much by a kind of PR victory and trumpeting of it as by
the actual crime.

What does that say to you that no one is rushing to claim credit?

LEITER: Well, I think the longer time goes on that no one claims credit,
the less likely that it is a terrorist event. That being said, terrorist
events and terrorists don`t always take credit. The best example of that I
think is Pan Am Flight 103 over Lockerbie.

HAYES: Right.

LEITER: In that situation, the Libyan intelligence services who
perpetrated the crime obviously were trying to hide their involvement.
They never did take credit. So, we do have instances of terrorist attacks
where terrorists never actually admit they were involved.

HAYES: Of course, that was a state actor. And I should note this -- the
one detail that gets people pretty pricked up is this Mr. Ali who
apparently bought the flights, bought the tickets, who`s an Iranian. We
should note that this was from the reporting we know a fairly trusted
intermediary in that area.

So, it`s not like a completely random thing this guy showed up. It`s
possible that he was just essentially a kind of intermediary travel booker
in that area.

LEITER: I think that`s how it appears right now.

HAYES: I don`t want to cast too much, you know, guilt on Mr. Ali.

LEITER: Of course. There`s plenty of guilt to cast at the Iranians, but
we shouldn`t necessarily cast that in this case with Mr. Ali.

And I think the fact that as he saw who was involved that he raised his
hand and said, no, I sold these tickets.

HAYES: Right. That`s right.

LEITER: They paid cash for --

HAYES: He came forward, actually, yes.

LEITER: I think that makes it much less likely that he was somehow
involved in some sort of scheme or plot.

HAYES: Passports. There`s essentially, I guess, a black market for stolen
passports. If you get a passport, this is just sort of a basic question,
OK, someone sells me a stolen passport, what do people do with a stolen
passport? You`ve got to cut out the photo presumably to get on an
airplane?

LEITER: It used to be much easier before we have what are known as machine
readable passports.

HAYES: Right.

LEITER: Now, when you come through a border, the customs officer slides
that through and that provides him with a lot of data. So, you still have
to actually remove the picture, put your new picture in. Once that`s done,
it`s very easy to still get caught because of those machine readable
characteristics.

In addition, at many border crossings, you`re going to provide a
thumbprint, fingerprint and a photo and in many cases that false user of
the passport can be caught through the biometric measures, not just what`s
in the passport itself.

HAYES: Obviously, if you`re an investigator on this right now, who`s not
working from the kind of crash side but from the counterterrorism side,
security side, you are trying to find out who were these two individuals
who were traveling?

LEITER: Absolutely. I think you`re really looking at four things if
you`re the counterterrorism guys today.

One, you really want to know who those two are. And you -- those are the
hardest people to identify because they had false papers.

HAYES: Right.

LEITER: Two, you`re still going to look at the other passengers, what
connections they had.

Three, you`re going to look at all the intelligence, before, during, after,
to see if there is anything credible about people being involved.

And last but not least, just like the National Transportation Safety Board
needs it, they need the forensic evidence from the crash site.

HAYES: Right. I really wonder how long it could possibly go that they
don`t have physical evidence and whether that mystery just endures in the
absence of the forensic evidence.

MSNBC analyst Michael Leiter, thank you so much.

LEITER: Great to be here.

HAYES: The first congressional election of 2014 is tomorrow in Florida,
and with millions of dollars spent in outside money, political ads by Bob
Barker like this one.

(BEGIN VIDEO CLIP)

AD NARRATOR: David Jolly for Congress.

BOB BARKER: Because with Jolly, the choice is right.

(END VIDEO CLIP)

HAYES: Get that? Choice is right? Because it is, of course, being
Florida -- well, it`s a race with plenty to talk about.

(BEGIN VIDEO CLIP)

BARKER: We`re back after this message.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

HAYES: Coming up, some dispatches from the department of unhelpful
suggestions about what to do with Ukraine and Russia featuring Dick Cheney
and Rand Paul.

Stay with us.

(COMMERCIAL BREAK)

HAYES: If you`re impatient about the midterms, if you want to know what`s
going to happen in the high stakes midterm elections this fall, then cast
your eyes to Florida which will hold the first congressional election of
2014 tomorrow. And it has been an all-out all hands on deck slugfest. And
the reason is this: Florida`s 13th congressional district was held by
Republican Bill Young who served 22 terms as a Florida congressman but who
died shortly after announcing his retirement last October. That created a
vacancy.

Now, young won re-election easily in 2012 with nearly 58 percent of the
vote. But at the presidential level, the district went for President Obama
by a very narrow margin.

So, this is a classic swing district battle.

The Democrat in the race, a strong candidate, Alex Sink, who ran an
unsuccessful but close race for governor in 2010, losing by just 1 percent
to now-Governor Rick Scott. Sink, however, won the 13th district in her
race for governor.

The Republican, David Jolly, is a former lobbyist with whom the National
Republican Congressional Committee expressed frustration after Jolly said
he disagreed with one of the NRCC ads against his Democratic opponent. A
senior NRCC official reportedly said, "Are you blanking kidding me?"

But the real energy behind this race and the reason it`s become a
referendum of sorts is just how much outside money is being spent. About
$12.5 million has flooded the special election, but less than one-third of
that sum was controlled by the candidate`s own campaigns, according to a
Center for Public Integrity analysis of federal records.

Even the top 10 most expensive Senate races range between $10 million and
$20 million. So this is one pricey congressional race.

The race has included the ugly spectacle of a sneaky Web site in which a
donation looking like one for the Democrat Alex Sink actually went to the
NRCC.

But perhaps the biggest reason that all eyes are focused on Florida`s
special election is the degree to which it`s being fought on the terrain
that everybody is thinking about, that everybody wonders about the impact
of in these midterms which is, of course, Obamacare.

(BEGIN VIDEO CLIP)

AD NARRATOR: Alex Sink supported it, and she still does. Now, Sink is
running for congress and she`s still pushing Obamacare.

DAVID JOLLY (R), FLORIDA CONGRESSIONAL CANDIDATE: I`m fighting to repeal
Obamacare right away.

AD NARRATOR: The priority is Obamacare, not us.

(END VIDEO CLIP)

HAYES: This has become an Obamacare election, and it is widely viewed as a
tossup.

Joining me now, Jess McIntosh, communications director for the political
action committee Emily`s List.

And, Jess, my understanding as a disclosure is Emily`s List has been very
active in the race.

JESS MCINTOSH, EMILY`S LIST: Oh, no, we are. We`re absolutely behind Alex
Sink. We supported her 2010 race and are thrilled to be supporting her
again here.

HAYES: OK. So, this race, election is going to happen tomorrow. Do you
think -- and I`m going to hold you to this now right before the election
results, so you can`t weasel your way out of it -- is it an Obamacare
referendum?

MCINTOSH: No. I think that Obamacare will certainly play a really big
role in it. But I think that the referendum is slightly larger than that.
I`m always wary of calling these things a bellwether no matter how
desperate we all are for real honest to God elections that aren`t just
polls.

It is, at the end of the day, a Republican district that`s been held by a
Republican for a really long time. I`m glad you brought up the --

HAYES: Wait, this looks to me someone looking at internal polling thinking
things aren`t going well.

MCINTOSH: No, I mean, honestly, if you`re going to make me predict, I
predict it`s going to be a Sink victory. But I predict it`s going to be
really, really close.

I think that when we saw the NRCC kind of throwing David Jolly under the
bus there, that was a little bit of expectations management. They know
they need to hold on to this. If they poured in -- it might be more of a
referendum on their strategy vis-a-vis Obamacare than Obamacare, itself.

HAYES: That`s a good point. That is --

MCINTOSH: If they poured in millions of dollars to discredit it and she
wins tomorrow, I think that`s a huge backlash for them.

HAYES: Yes. I think that`s going to be very interesting, right? Because
I think the narrative has been for a while, you hear this among strategists
of all parts of the spectrum that, yes, Obamacare has been a bit of a
burden, right, for Democrats associated with it. The rollout didn`t help.

The reality on the ground, we have new Gallup numbers showing the amount of
uninsured is ticking down. That reality might be getting better, but the
question of whether the kind of perception problems can be overcome by the
reality in time for the midterms. But if that doesn`t work out here, that
kind of throws a wrench into the entire strategy the right has for the
midterms, writ large.

MCINTOSH: I think that this issue is only going to get better for
Democrats. So if Republicans can`t win on it now, winning on it a few
months from now when there are more good stories and statistics are more in
our favor and more lies are being debunked from the right, I think it`s
going to be much, much trickier for them.

But Obamacare is not the only issue at play. David Jolly is a D.C.
lobbyist who lobbied against equal pay, which is women`s number one
workplace issue. He`s against -- yes --

HAYES: I`m glad you raised that. Before you give the rest of his bio, I
want to play this ad. You say, well, you know, conjure for me the perfect
resume for a candidate. D.C. lobbyist is not the one you`d go with.

MCINTOSH: That`s true.

HAYES: This is a sink ad that`s hitting David Jolly on privatizing Social
Security. He says he did not actually work on privatizing Social Security
even though a lobbying disclosure form seems to suggest he is. But that
part of his resume is proving to be a difficult for one for him to deal
with.

(BEGIN VIDEO CLIP)

AD NARRATOR: Now, David Jolly wants this to be his office --

(END VIDEO CLIP)

MCINTOSH: Yes. I mean, and we`re talking about Florida here, where this
is obviously one of the biggest issues that the electorate is going to have
to deal with. So I think, yes, Obamacare is certainly an issue and the
Republicans have tried desperately to make it the issue. But we`re also
talking about these economic justice issues Democrats have been more and
more vocal on that Republicans, frankly, have no answer to, things like
raising the minimum wage, like equal pay, like Social Security, like making
sure that we have a safety net, you know economically.

David Jolly doesn`t think those are issues that need to be addressed. He
doesn`t think that people are concerned by them.

And I think -- I think he`s going to find out that he`s mistaken.

HAYES: The interesting demographic nature of this race is the fact that
there are a lot of seniors and it`s part of the reason I think Alex Sink is
probably trying to hit David Jolly on, Social Security privatization. But
it`s also incredibly salient because the most effective ads Republicans
have run against Democrats on Obamacare is to scare seniors about the,
quote, "cuts to Medicare." That was the big very, very successful 2010 Tea
Party line that ran in ads across the country.

Has that been making itself known in this race? And what do you think
about the effects on that?

MCINTOSH: Yes, I don`t even think Bob Barker can sell this one to seniors,
honestly. I think, you know, I want to go back to 2012 when we saw a
similar sort of special election that was described as a bellwether. It
was Kathy Hochul in Upstate New York, which is a Republican district but a
little swingy. Her opponent had recently come out in favor of the Ryan
budget which would end Medicare as we know it and cut Social Security.

That wound up being a huge issue in that race and it was a sleeper issue in
that race. Kathy Hochul won and went on to usher in both major Democratic
victories in 2012, and 2012 the year of the woman.

So, sort of looking at the beginning of 2014 in this, our first special
election this year, I`m curious to see if those same dynamics are at play.
I imagine that they are.

I also want to point out that Alex Sink would be the 100th woman in
Congress, which I think is just so freaking cool. She`s, you know -- I
think there`s been a lot of -- a big mandate for women`s leadership and I
think it would be really special to see finally for the first time 100
women sitting in Congress.

So I hope we get to make that announcement tomorrow. I really do.

HAYES: Jess McIntosh from Emily`s List, thank you.

We will, of course, be covering this tomorrow night and get election
results hopefully, possibly in our hour.

All right. Here`s a question. Can what does actor Liam Neeson have to do
with horse-drawn carriages? The answer to that riddle is ahead.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

CHARLIE ROSE, CBS: Do you believe that President Putin believes that
President Obama is weak?

DICK CHENEY, FORMER VICE PRESIDENT: I think there`s no question, he
believes he is weak. We have created an image around the world, not just
for the Russians, of weakness.

President Obama`s got a steep hill to climb because he`s been so feckless
in responding to other crises.

(END VIDEO CLIP)

HAYES: From the department of unhelpful suggestions about what to do with
Ukraine and Crimea, and Russia, Vice President Dick Cheney weighed in this
weekend, suggesting the way to respond to President Putin is to look at
certain military options.

(BEGIN VIDEO CLIP)

CHENEY: Reinstate the ballistic missile defense program in Poland. He
cares a lot about that. Conduct joint military exercises with our NATO
friends close to the Russian border. Offer up equipment and training to
the Ukrainian military.

Take steps that will guarantee and convey the notion, especially to our
friends in Europe, that we keep our commitments. So far that`s in doubt.

(END VIDEO CLIP)

HAYES: For the record, those ideas make as much sense as you would expect
from the architect of the Iraq war and the torture regime.

Now, from the same department, the junior senator from Kentucky, Rand Paul,
gave his suggestions in an op-ed for "Time" magazine. They include
suspending aid to Ukraine because Ukraine owes money to Russia and
reinstituting the missile defense shield programs, but make Europe pay for
them.

And yesterday, he reiterated a solution we first found making the rounds
last week, promoting drilling and fracking as a way to help in the Ukraine
crisis.

And according to Senator Rand Paul, nowhere in the U.S. should be exempt.

(BEGIN VIDEO CLIP)

SEN. RAND PAUL (R), KENTUCKY: I would immediately get every obstacle out
of the way for our export of oil and gas, and I would begin drilling in
every possible conceivable place within our territories in order to have
production that we could supply Europe with if it`s interrupted from
Ukraine.

(END VIDEO CLIP)

HAYES: Joining me now, oil trader Dan Dicker. He`s the author of "Oil`s
Endless Bid: Taming the Unreliable Price of Oil to Secure Our Economy".

I want to talk about why this is a bad argument because despite the fact
your appearance on this show refuting it happened last week, people are
still making it which I can`t make heads nor tails of. But, quickly, it`s
amazing to me that this guy from the coal state is frack more, drill
everywhere, when that`s the thing that is killing coal in Kentucky.

DAN DICKER, OIL TRADER: Unless Rand Paul wants to see Exxon or Chevron
become state-run entities, you have to do something that is profitable in
order to get them to do it. Transporting LNG to Europe is so intensely
unprofitable. It looks like it should be profitable, and it might be right
now, but the chances of the expense that you`re going to take on to try and
build these export plans, and then finally get to a market state seven or
eight years down the road --

HAYES: Yes.

DICKER: -- where it works and you can make this money back over the course
of time, nobody wants to do this. In fact, we had a major oil company,
apache, run way from a British Columbia LNG plant because it`s not
profitable and it`s not going to be. It`s not anywhere -- there`s no way,
shape or form that you`re going to get a major oil company to commit to
making a long-term plan for LNG fuel.

HAYES: So here`s the key and irony I want to highlight. What you`re
saying are these great friends of the free market, right, the Rand Pauls of
the world and every Republican politician you can find, Democrats, too,
there are Democrats doing this as well. Saying this is a solution. We
have a crisis right now. We need to build, liquefy natural gas, export
terminals, ship our frack gas to Europe. These are the policymakers.
You`re saying the market is looking at it and saying, not on your life.

DICKER: Exactly. In fact, to show you how bad an idea it is, the only
place where it`s pushed forward is in a place in Maryland, which dominion
resources is using. What they`re doing is converting an import plan.
Think about that. The idea is that everything was reversed 10 years ago.

HAYES: This is great. Someone drew a blueprint and say we need an import
plan to import national gas. They built it. Guess what happened?

DICKER: They`re trying to recoup some of that money. It`s the only way.
Ten years ago we were paying $11 for natural gas and getting it from the
Saudis at $3. Now it`s reversed and everybody is saying it`s a good idea.
I promise you, I`ve traded this stuff for 25 years. You get five, six,
seven years down the road that market condition will not exist. It can`t.
By definition it can`t.

HAYES: This is exactly the point, right? The time horizon for all these
decisions. We have a crisis right now. Everyone`s talking about, well, we
have to build these things and frack more and ship the gas across. What
you`re saying, guys, those price conditions right now will not pertain when
this happens.

DICKER: They can`t by necessity. Besides that, you have this idea, what
is the vision the Republicans have for this country to become the kind of
petrostate that we exactly resent out of Venezuela, even Russia, itself,
which uses its oil and gas as a lever in politics? We`re going to become
this kind of Dystopian state that supplies energy for Europe and Eastern
Europe and --

HAYES: And shipping it everywhere, pushing everyone around because it
controls the means of energy production. That`s a really, really good
point. Oil trader, Dan Dicker, it`s always a pleasure. Thanks for coming
on. We`re going to keep doing this until they stop making the argument.

All right, you know how absolute nastiest conflicts are family feuds or
fights between once dear friends? Well, one of the most fascinating rich
dramatic political fights in the country right now is happening between two
men who were once friends. They say they still are. They belong to the
same party and govern political entities of the same name, and I will
explain ahead.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I`m a little bit pissed off at our elected new mayor.
He wants to close this horse and carriage industry in New York.

UNIDENTIFIED MALE: From my perspective, it does not seem to be, maybe this
is an emotional reaction, a particularly fulfilling life for an animal.
I`d love to see --

UNIDENTIFIED MALE: But it is --

UNIDENTIFIED MALE: We don`t know.

UNIDENTIFIED MALE: They are. They`re trained for this.

UNIDENTIFIED MALE: Unless it`s Mr. Edge, you really don`t know.

(END VIDEO CLIP)

HAYES: A little more awkward exchanges we`ve seen on the "Daily Show"
lately. It`s seemed neither the audience nor Jon Stewart himself knew
exactly how to react to Liam Neeson`s pro-horse and buggy message because
it seemed kind of random. But in New York City, it is a huge political
issue and it`s got a fascinating bit of backstory.

The campaign to end horse-driven carriages in New York City by animal
rights activists has been massively effective and it`s a huge part of what
knocked frontrunner Christine Quinn, Bill De Blasio`s primary opponent, out
of the mayoral race. In fact, a group of horse lovers helped back the
first major ad buy in the entire mayoral campaign, an ad against Christine
Quinn.

Was a campaign that helped propel De Blasio past Quinn to become the
Democratic nominee for mayor and then win the entire race. Which is why as
soon as he got into office one of Mayor De Blasio`s first acts was to end
the horse-drawn carriages in New York City. So enter this guy.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I don`t know what you want. If you`re looking for
ransom, I can tell you I don`t have money, but what I do have are a very
particular set of skills. Skills I`ve acquired over a very long career.
Skills that make me a nightmare for people like you.

(END VIDEO CLIP)

HAYES: Yes, Liam Neeson has rushed to the aid of the ticked off horse
carriage operators and owners who, of course, don`t want their business
banned. Neeson, who has been working on this issue since 2009, has even
drawn the ire of PETA, but he`s not scared.

(BEGIN VIDEO CLIP)

LIAM NEESON, ACTOR: Horses been here since before Abraham Lincoln`s first
inauguration, 1858. These horses are well cared for.

(END VIDEO CLIP)

HAYES: Well, that`s unfortunately quite not completely true. There have
been documented incidences of animal cruelty, car crashes and I think it`s
generally not great for the horses. Here`s the thing. Liam Neeson is far
from the only powerful enemy the new mayor has made. The charter school
industrial complex and its Wall Street backers have declared war.

The woman who has De Blasio`s old job is now suing him and the one man with
the most power to destroy the mayor`s agenda has basically gone Liam Neeson
on him as well. I`ll explain it all, next.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I`m very excited about the new mayor and I`m excited
about the potential for the city and the state. I`ve known this mayor for
a long, long time.

(END VIDEO CLIP)

HAYES: You see, New York City Mayor Bill De Blasio and New York Governor
Andrew Cuomo, they go way back. The two Democrats have known and worked
with each other for decades. They met in 1992 on the Gore/Clinton
campaign. De Blasio then works for Cuomo at the Department of Housing and
Urban Development after became secretary of HUD in 1996.

And De Blasion then went on to run Hillary Clinton`s Senate campaign in
2010, which Cuomo served as informal adviser. In 2010, when Cuomo needed
someone to pass on a message in a delegate endorsement negotiation, he
found a messenger, his old friend, Bill De Blasio.

So when Bill De Blasio rocketed to political stardom last year using the
unapologetically populous rhetoric that Andrew Cuomo has made his career
avoiding, you couldn`t help but wonder how is this going to work out? In
the beginning there were smiles, even pronouncements of friendship. They
were going to try to make it work.

(BEGIN VIDEO CLIP)

GOVERNOR ANDREW CUOMO (D), NEW YORK: We use the word, friend, in politics
often, and sometimes casually, but the new mayor of New York truly is a
friend in the deepest sense of the word. We go way back. We work together
on a professional level. Personally, we`re friends.

(END VIDEO CLIP)

HAYES: They may be friends in the deepest sense of the word, but it`s
increasingly clear they are not allies. Bill De Blasio signature campaign
pledge was on universal Pre-k funded through a so-called millionaire`s tax.
But in order to raise taxes, he needs approval from Albany. Cuomo has made
it clear that is not going to happen. He`s countered De Blasio`s pledge to
raise taxes with the tax cut.

Bill De Blasio wants a higher minimum wage for New York City. Cuomo almost
immediately called the plan chaotic. And since then, things have only
gotten worse. Late last month, De Blasio`s administration announced they
would not be green lighting a handful proposals for charter schools to
share space with public schools across the industry.

Meaning three charter schools that are part of the high profile success
academy would lose space. The group, outraged by the decision, headed to
Albany to rail against the mayor and joining them at their rally was a
special guest with none other than New York Governor Andrew Cuomo.

(BEGIN VIDEO CLIP)

CUOMO: We are here today to tell you that we stand with you, you are not
alone. We will save charter schools.

(END VIDEO CLIP)

HAYES: Not only was Cuomo speaking at a rally against the mayor`s agenda,
but De Blasio was speaking just down the road at a competing rally. Today
the success academy whose rally Cuomo attended filed suit against De
Blasio. The incident has led many longtime political observers to think
something like this.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Boy, that escalated quickly. I mean, that really got
out of hand fast.

UNIDENTIFIED MALE: He jumped up a notch.

UNIDENTIFIED MALE: It did, didn`t it?

(END VIDEO CLIP)

HAYES: Joining me, Michael Grynbalm, city hall bureau chief for "The New
York Times." Michael, you have a great piece in the "Times." You co-wrote
about Cuomo using De Blasio`s a foil, right. First question, did you see
this coming? Because I have to say, I did.

MICHAEL GRYNBAUM, "THE NEW YORK TIMES": I think there was a suggestion
there was going to be tension there. The fact they strenuously describe
themselves as longstanding friends for 20 years, even as the governor was
pursuing this agenda that was blocking the mayor at every turn. We were
getting a sense early on this was not going to be a smooth relationship.

HAYES: That rally, I cannot think of a precedent for that. I mean, that
was going nuclear. Absolutely, unequivocally to everyone who witnessed it
totally nuclear war.

GRYNBAUM: Well, that`s right. Governor Cuomo has long been sympathetic to
charter schools. I think he passively said he`s supportive of it. We`ve
never really seem him get in front of a rally of thousands of advocates.
He sounds, he was almost channelling the fierceness that Mayor De Blasio
brought down the campaign trail except for a very different philosophy.

HAYES: Well, it`s a perfect mirror image. I think one of the things we
are seeing here is that people who are outside New York don`t know this
about Governor Cuomo, but he`s loved to use Democrats as foils. He has
loved to push against Democrats, particularly left-wing Democrats to show
how centrist he is. He just got given a political gift in the person of
Bill De Blasio who ran a very unapologetically progressive populous
campaign.

GRYNBAUM: I think that`s right. He saw, Mayor De Blasio, as soon as he
was elected, catapulted into the national spotlight. Right at the time
that Governor Cuomo who many believed is planning perhaps a run at the
Democratic nomination for president a few years is trying to boost his own
image. He saw a lot of opportunities to exploit left-leaning views to set
himself up as a foil.

De Blasio said he wants New York City set its own minimum wage. Cuomo
said, you know, what I think that`s a state matter. The tax on the rich
that Mayor De Blasio`s made the signature issue not only of his campaign,
but of the early days of his administration. Andrew Cuomo came out and
said I`m looking to cut taxes. I`m looking to be more sympathetic to the
business community.

HAYES: We should be clear. Andrew Cuomo has fought against higher taxes
for the rich from the moment that he came into office. This is not some
sudden thing that he`s found in the De Blasio ear. I mean, he has been
consistently against higher taxes on the wealthy in New York.

GRYNBAUM: There was a millionaires tax that ended up passing the
legislature and actually Governor Cuomo has now said because that`s went
through that`s why he would prefer --

HAYES: The backstory, it basically passed in spite of Andrew Cuomo as
opposed to because of Andrew Cuomo. Even if he signed it, we should know,
right.

GRYNBAUM: It did go through under his purview, just to note that.

HAYES: The question is, how does this play out? Because at this point,
you really got open warfare and becomes less and less credible for the two
men to be like, we`re friends, we`re friends while they are, like, sticking
knives at each other while everybody watches.

GRYNBAUM: Well, I`ve spoken to aides of the mayor and asked them. It
steams every turn, as the governor -- the mayor`s people continue to insist
they`re friends, they haven`t really fought back. At first, I got the
sense that they felt antagonizing the governor would actually be against
their ultimate interest.

That mayor`s people believed that if they can ultimately get some form of
the pre-kindergarten program expanded in New York City, the political
benefits of that, seven months from now New Yorkers look, see kids, parents
walking into prekindergarten programs, they`ll think while voters won`t
care about this battle that happened up in the state capitol a few months
earlier.

HAYES: The problem is how much power Andrew Cuomo has relative to Bill De
Blasio in terms of getting that agenda through. Michael Grynbaum, City
Hall bureau chief for the "New York Times," thank you so much.

All right, this fight has occasioned or is being occasioned by a big battle
about charter schools. A debate between New York City public schoolteacher
and education reform advocate who favors charters, ahead.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

ANNOUNCER: These are the 194 faces of Success Academy`s Public Middle
School in Harlem. They love their school, and all the opportunities it
brings, but Mayor Bill De Blasio just announced he is closing their school,
taking away their hopes and dreams.

(END VIDEO CLIP)

HAYES: That ad, how would you like to be on the wrong side of that ad?
New York Mayor Bill De Blasio is now facing not one, but two lawsuits
stemming from his administration`s latest decision on charter school
proposals to share space with public schools in New York. The first from a
powerful charter group is suing the mayor for canceling their so called co-
locations. That`s when they are housed in public school space.

Now the other lawsuit is from public advocate, Laticia James, who`s arguing
the De Blasio administration approved too many charter proposals. Bill De
Blasio, the honeymoon is officially over. Joining me now, New York City
public school teacher, Brian Jones, co-producer of "The Inconvenient Truth
Behind Waiting for Superman," and James Merriman, he is CEO of the New York
City Charter School Center.

All right, respond to that ad. Whenever you get charter school stuff, the
hardest thing is to look into the faces after those kids like they were at
the rally in the ad and be like, sorry, guys, I`m giving you the ax. How
do you respond to that?

BRIAN JONES, PUBLIC SCHOOL TEACHER: Look into the face of the kids at PS-
30, and look into the face of the kids at PS-123 and look into the face of
the kids at PS-149 who have had to share space with Eva Moskowits` empire.
Look into their faces and look at the music space that lost its program,
the theater program, the physical therapy program that lost its space.

HAYES: You`re saying there are losers we aren`t seeing from the existing
set of arrangements.

JONES: Absolutely. Absolutely. I don`t want to begrudge any student or
family their success. But when it comes at the cost of another child`s
success then we`re getting into a dangerous territory here. And we`re
losing the universalistic aspiration of public education.

HAYES: OK. Here`s the thing that I want to know.

JAMES MERRIMAN, CEO, NEW YORK CITY CHARTER SCHOOL: Sure.

HAYES: A 160 public schools were closed during Bloomberg, some of which
over huge, huge community pushback, right. I did not see the charter
movement, did not see the big donors for these places out there running
rallies. I did not see ads like that, multimillion dollar ad campaigns.
When neighborhood schools got closed against the community wanting them
closed, there was no one there to stage rallies except the folks in the
neighborhood. Suddenly you try to close a charter school, there are a lot
of people writing big checks. How do you account for the difference?

MERRIMAN: Sure, there`s a simple difference. The charter school is really
literally one of the highest performing schools in the state. The mayor
said today on TV that one in four kids are ready for college in New York
City. Coming from the public school system. And if this school is getting
kids ready for college, that`s a school that has to be embraced and he,
himself, has reversed course and said we need to find a home for that
school.

HAYES: Are charter schools a crowbar to pry open public education?

MERRIMAN: Absolutely not.

HAYES: Why not?

MERRIMAN: Why not, because they`re public schools.

HAYES: They`re public schools now.

MERRIMAN: They`re always be public schools.

JONES: Right. The difference is that in charter schools, you`ve see that
you are right as a citizen to place your child in that school. You don`t
come as a citizen empowered with rights. You come as a customer.

HAYES: Explain the difference. What do you mean by that?

JONES: In other words, you have to win a lottery. You can be pushed out
of the school. You`re moves toward a market model, like Burger King, no
shirt, no shoes, no service. They reserve the right to refuse your
service. For some parents, that`s a bargain. Sure, I`ll give up my
citizen right in order to get this product I want if the school is a better
fit for their child. But for us as a society --

HAYES: Right, but respond to the fact. If he`s saying you`re closing down
a school that`s producing good outcomes. Do you want this airy notion of
citizenship or want your kid prepared, most want their kid prepared.

JONES: The Success Academy schools are suspending students at a right
that`s three times as high as the district average where they`re located.
We have three times, twice as many, three times as many suspensions. A
third of the English language learners, a low fraction of the special needs
students. So we`re playing with those kinds of numbers, sure, we might be
able to get results but at what costs?

HAYES: This is one of the big arguments against charter schools. The
charter movement in general is this notion of creaming. This notion you`re
pushing students out. District 75 which is sort of the organizational part
of the system in New York that handles students with special needs, a range
of spectrums don`t end up often in charter schools. How do you respond?

MERRIMAN: Well, first of all, increasingly we are serving those students.

HAYES: But nowhere near the same rates. Let`s be clear.

MERRIMAN: We`re getting there. We`re getting there and we are willing to
work with the mayor on how to get there. Number two, he`d describe a
system in which you`d give up rights to go to a school. What about a
system which we have in New York, if you`re in East New York, Central
Brooklyn in a zone school, that`s your only choice is to go to the school
that the districts assign you. If it`s failing, it`s a take it or leave it
proposition. If you`re poor, it`s a --

HAYES: A second ago you were talking about how it`s always going to be
public schools. If it`s choice, let`s have school choice. Privatize the
whole thing. The argument you just made is exactly the argument people
make for privatizing education.

MERRIMAN: We`re not privatizing it.

HAYES: If you believe it, if you think it`s ridiculous to consign someone
to the absolute unfairness of having to go to their local school, why don`t
you also just take the next step and say let`s get privatized schools?

MERRIMAN: Because I`m not a believer in privatized school. I`m a believer
in a public school system and charters as a part of that system. I think
we need different providers within that public system.

JONES: When I talk to parents who are from charter schools, it`s amazing
what they say. Charter school parents anywhere you go say the same things.
They say the reason I like my charter school, when they do like their
charter school, is smaller class sizes. The rich curriculum. They get to
do science experiments, be on a sports team, take karate or have dance.
Those are things we`ve been fighting for in public schools for eons. To
me, if you have a failing school, closing it down or replacing it with a
selective school that kicks out special needs students doesn`t solve the
problem.

HAYES: There`s also a competition and also innovation argument, right?
Which is that these can be laboratories for figuring stuff out. That you
can`t with the big bureaucracy. That doesn`t strike me as --

JONES: Right, but we see most of the experimenting has to do with
increasing the pressure to raise test scores and everything that goes along
with that. I don`t see these -- the charter schools that I`ve seen with my
own eyes that I`ve experienced are not laboratories of progressive
education. They`re test --

HAYES: Given the fact that 36 of the 45 co-locations in this case were
approved, is this blowback completely out of scale to what happened?

MERRIMAN: I don`t think the blowback is out of scale. We`re also talking
about those three schools. We are also talking about the future. Are
charters going to be able to co-locate in the future? Today the mayor said
some good things. He met with charter leaders. He said co-location is
going to continue. I`m looking to work with the mayor. I think this is a
very loud argument. It`s a loud argument because we all care about kids.
I hope we`re able to put the politics behind us and move on.

HAYES: New York City public school teacher, Brian Jones and James Merriman
for the New York City Charter School Center. Thank you both. That is all
for this evening and "THE RACHEL MADDOW SHOW" starts right now. Good
evening, Rachel.

END


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