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All In With Chris Hayes, Monday, April 14th, 2014

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ALL IN with CHRIS HAYES
April 14, 2014

Guests: Eric Boehlert, Jon Ralston, Simon Ostrovsky, Morris Dees, Matt
Taibbi

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

Hundreds of armed demonstrators faced off with the federal government
in southern Nevada over the weekend, and the federal government blinked.
Just another reminder that whether or not the law is enforced depends on
who you are and whether or not you have the right wing media on your side.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Battle of big government versus the rancher.

UNIDENTIFIED FEMALE: It`s big government versus the rancher and Mr.
Bundy is not backing down.

UNIDENTIFIED MALE: When push comes to the shove when it comes to the
Constitution, folks aren`t going to back down.

UNIDENTIFIED MALE: I`ll be honest, we saw what happened at Waco and
the Branch Davidians, I`m concerned.

HAYES (voice-over): Right now, the biggest story in the right-wing
media is the face-off between federal agents and this man, Nevada rancher
Cliven Bundy.

CLIVEN BUNDY, NEVADA RANCHER: America better wake up if we`re going
to live in this country with any kind of freedom and liberty.

HAYES: Mr. Bundy owns around 500 head of cattle. They`ve grazed on
this plot of land in southern Nevada for decades. But Bundy doesn`t own
that land. The federal government does.

And in order to graze cattle on federal land managed by the Bureau of
Land Management, you have to pay land use fees. Bundy stopped paying those
fees in 1993. He now owes the government over $1 million.

You see, Bundy doesn`t think the federal government owns the land. In
fact, he doesn`t recognize the federal government at all.

BUNDY: I abide by all of Nevada state laws, but I don`t recognize
United States government as even existing.

HAYES: The courts disagree with Mr. Bundy`s reading of the
Constitution and have ordered him to pay for his use of the land like every
other rancher does. Last year, a federal district court ruled that the BLM
was entitled to seize and remove Bundy`s cattle.

AMY LUEDERS, BLM: He owes the American people $1 million because he
has not obeyed the laws.

HAYES: Earlier this month, BLM started rounding up some of Bundy`s
cattle that illegally grazed on federal lands.

CROWD: No BLM! No BLM! No BLM!

HAYES: On Wednesday, a confrontation between Bundy family members and
supporters and federal rangers went viral.

UNIDENTIFIED MALE: Comply, comply.

HAYES: The feds say officers were assaulted and a police dog was
kicked.

While Bundy family members allege they were thrown to the ground and
also tased.

BUNDY FAMILY MEMBER: We have always said that we will do whatever it
takes. We`ve never defined that. And I think that`s one of the reasons
they`re here with such force is they`re scared of us.

HAYES: Within days, Bundy became a symbol of the fight against an out
of control federal government.

JIM LARDY: We need guns to protect ourselves from a tyrannical
government.

HAYES: Hundreds of states rights protesters flocked to Bunkerville,
Nevada, to support Bundy. Many of them armed.

UNIDENTIFIED MALE: I`m willing to lay my life down.

HAYES: The group shut down several lanes of interstate and waged in
intense negotiations with federal law enforcement.

UNIDENTIFIED FEMALE: Protesters flooded the federal holding pen area
aiming to release Cliven Bundy`s cattle.

UNIDENTIFIED MALE: Let me work with you and you. You two can come in
with me. That`s it.

UNIDENTIFIED MALE: It`s the people or not. You guys need to leave.

UNIDENTIFIED MALE: Push these people back so they can go safely.

UNIDENTIFIED FEMALE: Federal officers tried to bring the Bundys over
the line to negotiate.

UNIDENTIFIED MALE: I`m going to walk you in so you can negotiate with
your father and talk.

UNIDENTIFIED FEMALE: Walking past armed BLM rangers, the Bundy
started talks about releasing the cattle and calming the crowds.

UNIDENTIFIED MALE: I need you to keep the crowd calm above and below.

HAYES: After a day`s long standoff with federal authorities, Cliven
Bundy won the day.

BUNDY: I want to talk to one person in each county across the United
States, and here`s what I want to say. County sheriff, disarm U.S.
bureaucracy.

HAYES: This weekend, the BLM started to release Bundy`s cattle and
suspended their operation, citing safety concerns.

In the meantime, Bundy has been elevated to hero status by Republican
politicians.

MIKE HUCKABEE (R), FORMER ARKANSAS GOVERNOR: Out in Nevada today,
federal agents are pointing rifles at American Citizens in an escalation of
a standoff over a man who for 20 years has grazed his cattle on some land
that the state owns.

HAYES: For two decades, Cliven Bundy has gotten something for
nothing. He`s been in open violation of the law and owes the federal
government over a million dollars. If all of that were true of someone
else, conservatives would be calling them a freeloader.

(END VIDEOTAPE)

HAYES: Joining me now, Eric Boehlert, senior fellow at Media Matters.

Eric, how -- this story seemed to come out of nowhere and just blew up
in the conservative media. I mean, it was everywhere, Drudge, FOX. How
did this guy become this kind of almost overnight celebrity?

ERIC BOEHLERT, MEDIA MATTERS: Right. If this had been a Republican
in the White House, this would have gotten five minutes for the right-wing
media. Because it`s a Democrat is in the White House, suddenly the
government takes on tyrannical powers and things like this.

So, look, they`re always in search of the outrage. It`s the outrage
industry. And he declared a range war. The federal government made it
known they were going to come and take his cattle, and then, you know, Sean
Hannity and Drudge, you know, it`s a very small group, and they are all in
the same spin cycle, and everyone loved it.

HAYES: I mean --

BOEHLERT: There was no questions asked. They just loved it.

HAYES: Right, that`s the thing. Look, of all the people to make your
cause -- you just look at the facts. The guy says he doesn`t acknowledge
the existence of federal government.

BOEHLERT: Right.

HAYES: He has not been paying for the land that his cows are using.
I mean, this is the same media always talking about takers, about moochers,
about freeloaders. When it comes time for immigration, they say the law is
the law. You can`t just (INAUDIBLE) these people breaking the law. People
have to be held accountable breaking the law. The guy is manifestly
breaking the law.

BOEHLERT: And he`s not a part of a larger movement. He`s not in any
terms of rights movement. He`s one guy who doesn`t want to pay.

HAYES: Who doesn`t want to pay for his cows to eat grass on federal
land.

BOEHLERT: And the hypocrisy is so wide ranging.

So Obama, one of the central arguments about Obama, the right-wing
media -- lawless, refuses to acknowledge the Constitution, is above the
law.

Occupy Wall Street, what was the number one complaint from Sean
Hannity and Limbaugh? They`re breaking the law. They won`t listen to the
cops and things like that.

So, you know, law and order is supposed to be a bedrock principle.
But they are always trolling from this Obama angle. So, they`ll upend what
is supposed to be a bedrock principle, law and order.

HAYES: You talk about Obama. What struck me about this, is this
really seemed like 1990s vintage conservative activism. And I mean,
Hannity talks about Waco, he talked about Ruby Ridge.

And let me say this. The decision to deescalate by the Bureau of Land
Management, I tip my cap to them. I think it`s the right decision. No one
should be shot or even tased over these grazing rights. Like it`s not
worth it. I`m glad to see the federal government de-escalating.

But this does remind me of the Clinton era vintage peak militia
paranoia.

BOEHLERT: Right, absolutely. The sort of insurrectionist, anti-
government, federal government is at war with the people and right. So, we
saw it with Clinton. We saw it with Obama. There was an eight-year gap in
between for this insurrectionist rhetoric, and again, it all comes back, if
you take a couple steps back to Democrats in the White House, to Obama and
this sort of anti-government fever. And yes, they`re definitely looking at
Waco and Ruby Ridge.

HAYES: Do you think there`s a dangerous precedent -- and again, I
think the Bureau of Land Management played this correctly in backing down.
Is there a dangerous precedent that says the law does not get enforced if
you can get several hundred people bearing guns to show up and stand in the
way of the federal officials who would enforce that law?

BOEHLERT: Right. But it wasn`t just those hundred people. It was
the echo machine. It was the right-wing noise machine, and it was the
combination of the two that has now set the precedent. If this precedent
were flipped and there was liberal activists or immigration activists, you
know, they would be crying foul.

HAYES: Are we on the other side of the hypocrisy? Would we be
celebrating if it was a war tax resister? If it was someone who was sort
of trying to stay in a foreclosed home? I mean, don`t we all want the law?
We want the law to be broken symbolically --

BOEHLERT: Sure.

HAYES: -- when it`s the law we don`t like.

BOEHLERT: Yes, but, again, I think we go back to this instance, you
know, if someone was staying in a foreclosed home, they would be
representing a larger movement of plight. This is one guy who said to the
federal government, I`m not sending you checks anymore.

HAYES: And let me say this about Cliven Bundy, the guy is doing quite
well for himself. I mean, this is not a downtrodden individual, we should
be clear. This is not someone whose family is starving, who is in dire
straits because he has to pay the grazing rights. He actually runs a very
successful ranch.

BOEHLERT: And he`s got a very good publicist.

HAYES: Eric Boehlert from Media Matters, thank you so much.

Joining me in Nevada, political journalist Jon Ralston, host of
"Ralston Reports", editor (INAUDIBLE).

Jon, this is the biggest story in the conservative media nationally,
but I also get the sense it is a huge story in Nevada.

JON RALSTON, RALSTON REPORTS: Well, it`s a big story now here, Chris,
because of all of those people who came down from out of state, and you and
Eric laid it out very well. I mean, this completely got out of hand and
was twisted into something that it wasn`t.

Cliven Bundy is not a hero. He`s not a victim here. He`s a guy who
essentially has gotten away with breaking the law for 20 years.

And while I think you`re right, the BLM had to stand down at the end,
they botched this at the beginning. They set up idiotic First Amendment
zones for the protesters, and they helped make Bundy into a hero. It spun
out of control. So, all these militia types and the oath keepers come from
all around. And they had a situation they could not control.

I`m glad they stood down, because you`re going there (INAUDIBLE) shot,
a kid could have gotten killed. You don`t know what would have happened.

But the biggest story here to me here in Nevada is these Republican
politicians trying to get mileage out of this, going back to the sage brush
rebellion, which, by the way, was settled in court here in 1979 when an
attorney general by a name of Richard Bryan filed a lawsuit and lost.

These politicians enabled potential violence. Their bloods would have
been red if anything had happened. I`m talking about candidates for
Congress. I`m talking about legislators, to a lesser extent the governor
and Senator Dean Heller, they first attacked the BLM, and then I think they
realized they had maybe gone too far and said calm down now.

But you cannot put the cork back in this bottle once it`s open.

HAYES: And we should note that the background contact for this is the
federal government is the largest landholder in Nevada and owns a huge
swath of the state, 70 percent, 80 percent, something like that if I`m not
mistaken. And also the process is routine.

I mean, there are tons of ranchers, 99 percent pay the grazing fees.
This is not like this is some special case. This is a fairly routine
transaction.

RALSTON: Yes, one of the points that I raise, and it`s actually 85
percent to 87 percent of the land, which is why it`s been such an issue.
What kind of a message is the BLM is sending and has been sending since
1993 to all the ranchers who pay their fees, who obey the law and are
making some money, but they pay the fees to the federal government, when
they let Cliven Bundy get away with this for two decades and handle this in
such an abysmal way they have to back down at the end. Then the
conservative media echo chamber.

And it`s funny that you and Eric talk about this being directed at
Obama. It`s all being directed in the conservative blogosphere at one
person, Harry Reid. With all kinds of crazy conspiracy theories that he
wants the land for a solar plant, even though the solar plant they`re
talking about is 200 miles away.

HAYES: I read that, I read this, I think it was on "Power line",
which is not a fringe blog, right? They made reference, well, there`s
rumors he wants the land for a Chinese built solar field right there, which
is totally baseless, we should say.

But yes, this has become Harry Reid as the face of tyrannical
government.

RALSTON: Yes, he`s being blamed for this and he`s a great boogie man
here in Nevada. But that solar plant is planned down near Laughlin, which
is nowhere near it. But they`ve come up of all kinds of things they wanted
for fracking.

Let`s forget about that for a second. The issue here is very simple.
This is not his land. It`s never been his land.

And now, think what about what he`s saying today, Chris. He`s saying
we want county sheriffs to disarm federal agents of the law. There`s still
people out there that these militia types, the Oath Keepers, there`s a
Republican assemblywoman by the name of Michelle Piori (ph) who is whipping
this up, referring to the government, and doing what irresponsible
legislators always do, choosing for the lowest common denominator, the Nazi
analogy.

So, that`s still going on today in this state, Chris.

HAYES: Nevada political journalist Jon Ralston with a report from
Nevada -- thank you so much. Appreciate it.

RALSTON: You bet.

HAYES: All right. Coming up, the situation in Ukraine is escalating,
as the country may be on the edge of a civil war. An eyewitness account
from the ground is ahead.

(COMMERCIAL BREAK)

HAYES: Coming up, a big weekend for 2016 contenders in New Hampshire
that sure looked a lot like the campaign trail.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Thank you for coming to New Hampshire.

(END VIDEO CLIP)

HAYES: That is probably one of a small handful of things the
Republican Party can agree on these days. Acquainting yourself with all
the babies in attendance at political events is good business. So, is
telling your base exactly what it wants to hear, and I will explain ahead.

(COMMERCIAL BREAK)

HAYES: At this hour, the country of Ukraine looks like a country
pitched on the precipice of civil war, disillusion or invasion. In as many
as a dozen cities across eastern Ukraine, pro-Russian separatists have
taken over police headquarters or other government buildings.

In Slaviansk, the police station is surrounded by barricades and armed
men, all of them in unmarked uniforms, and nearby airfield has been seized
again by armed men, just about 90 miles west of the Russian border. In
Hurlivka (ph), pro-Russian activists stormed the police headquarters, even
after the Ukrainian government in Kiev had warned it was preparing to act
and would set a deadline.

Many of those watching this unfold had assumed the separatists have
been either coordinating with or are agents of Russia.

(BEGIN VIDEO CLIP)

REPORTER: Meeting the new (INAUDIBLE), these police demanded to know
who he was. His answer confirmed what everyone suspected.

(SPEAKIGN FOREIGN LANGUAGE)

REPORTER: A lieutenant colonel (ph) in the Russian army.

And if a drive in Ukraine`s east is anything to go by, he has many
loyal foot soldiers.

(END VIDEO CLIP)

HAYES: All of this is looking all too similar to what happened in
Crimea. Pro-Russian protests, followed by armed men seizing government
buildings, followed by an influx of unmarked troops, which in Crimea was
then followed by outright annexation. This time around, the Ukrainian
government`s deadline to the separatist to leave government buildings or
face military expulsion came and went today with no action by the
government. Up to 40,000 Russian troops as well as tanks, artillery and
fighter jets are amassed in Russia mere the eastern border of Ukraine.

Meanwhile, tensions between Russia and the U.S. have escalated. A
Russian attack warplane repeatedly buzzed a U.S. Navy guided missile
destroyer in the western Black Sea on Saturday, according to military
officials. And the U.S. sends CIA Director John Brennan to Kiev over the
weekend. White House spokesman Jay Carney saying it was part of Brennan`s
planned trip to Europe.

Today, President Obama and Russian President Vladimir Putin spoke by
phone yet again as the situation intensified.

And joining me now by phone from Donetsk, is in eastern Ukraine, is
"Vice News" correspondent Simon Ostrovsky.

Simon, you were covering Crimea. You are now in eastern Ukraine.
Does this look like a repeat of what you saw Crimea?

SIMON OSTROVSKY, VICE NEWS (via telephone): A lot of the same seems
to be happening. It was something hard to think possible about a week ago,
but it looks like more and more cities are being taken over by forces that
are supporting Russia, and, you know, the next step seems like it might be
exactly what happened in Crimea. That`s what it is looking like.

HAYES: Vladimir Putin, in the Russian government said, "In response
to U.S. president`s expressed concern about Russia`s alleged interference
in southeastern Ukraine. The president noted such speculations are based
on inaccurate information."

Based on what you are seeing, are these people taking over government
buildings, protesting, acting independently, or are they coordinating with
Russian forces, Russian agents?

OSTROVSKY: Well, they`re definitely coordinating with each other
because if you look at the map, you can see that the talents that are being
taken over almost form a straight line down from the northern part of
eastern Ukraine to the southern part of eastern Ukraine, almost to Crimea,
and there`s definitely coordination between the various pro-Russian forces
and now there are various videos are emerging with men in uniforms who are
actually claiming to be from Russia.

I haven`t met any personally myself who said that they`re part of the
Russian military, but we were today filming the story of a police
headquarters, and we saw a lieutenant colonel who then introduced himself
to Ukrainian police there as a member of the Russian army. So, this might
be confirmation. Obviously, I didn`t check his documents or his passport,
but this could be some of the early confirmation that the Russians have
been behind some of this.

HAYES: I wonder what the reaction of residents of these cities is to
watching this happen in the same kind of slow motion fashion it appeared to
happen in Crimea, do you get a sense that there`s fear, there`s support,
there`s a kind of rift between citizens who think this is horrible what
they`re viewing and those who welcome it?

OSTROVSKY: I think there`s a segment of these populations in these
towns, which is happy to see what`s happening, and they come out to the
squares in front of these occupied buildings. There`s maybe a bigger part
of the population that is either against it or indifferent or just in some
kind of an order, or some kind of sense of order, and doesn`t actually
participate actively in supporting the militants who are taking over these
buildings.

But you also see a lot of the same people involved in the takeovers
and one town involved the takeover of another building in a town just
further down the road. And so, you do see some of the same people popping
up as these buildings are being taken over, and these towns are being taken
under control of people who support the Kremlin.

HAYES: The interim government in Kiev had issued an ultimatum which
seemed to pass without retreat by those forces that are occupying
government buildings. Is there anything that the Ukrainian government in
Kiev can actually do, short of, you know, full-scale violent conflict with
the folks that are barricaded in these buildings? I mean, do they have any
real cards to play short of something that would start to look terrifyingly
like outright civil war?

OSTROVSKY: Well, I think that they could do more than make empty
threats, because from my perspective, that`s not very productive at all.
That made plenty of ultimatums before now. This isn`t the first one. And
they`ve not really acted on any of them.

And I think that only encourages the pro-Russia forces because they
see the Ukrainians don`t have the stomach for a fight. I`ve heard reports
that supposedly there`s a build-up of troops 100 kilometers north of
Slaviansk, but whether that`s true or not, I don`t know, we`re probably
going to head that way tomorrow morning to verify if the Ukrainians
actually are on the move to face off with these militants. But, you know,
so far when they`ve made these kind of warnings and threats before, they
haven`t -- they haven`t acted on them.

HAYES: "Vice News" correspondent Simon Ostrovsky on the phone Donetsk
in eastern Ukraine -- Simon, thank you.

OSTROVSKY: Thanks.

HAYES: Coming up, a white supremacist will likely face federal
charges of hate crimes after allegedly killing three people yesterday in
Kansas.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I was there when they took him into custody. As
he was sitting in the p back of the police car, the man yelled an anti-
Semitic remark to our camera.

(END VIDEO CLIP)

HAYES: That man is Frazier Glenn Cross, who has already served prison
time for several crimes, including plotting the assassination of my next
guest.

Stay with us.

(COMMERCIAL BREAK)

HAYES: Federal authorities in Kansas City today announced that 73-
year-old Frazier Glenn Cross, who also goes by the name F. Glenn Miller,
will face hate crime charges. He was arrested Sunday in the shooting
deaths of three people outside two separate Jewish facilities near Kansas
City. Sixty-nine-year-old William Corporon has reportedly driven his 14-
year-old grandson Reat Underwood to the Jewish community center so he could
audition for a singing competition. They were killed first. Then, a third
victim, 53-year-old Terri LaManno, who was killed while visiting her mother
at the Village Shalom assisted living facility.

(BEGIN VIDEO CLIP)

WILL CORPORON, UNCLE & SON OF VICTIMS: It takes no character to do
what was done. It takes no strength of character. It takes no backbone.
It takes no morals. It takes no ethics. All it takes is an idiot with a
gun.

(END VIDEO CLIP)

HAYES: Cross, the lone suspect right now, has a long history of anti-
Semitism and a close relationship with the Ku Klux Klan. And to those who
monitor this sub-culture, particularly the white supremacist and neo-Nazi
subculture, Cross` arrest does not exactly come as a surprise.

According to the Southern Poverty Law Center, Cross is a former green
beret who served in Vietnam, first turned to white supremacist groups in
the `70s before forming the Carolina Knights of the KKK in which he served
as the grand dragon. The SPLC says Cross represented a new militant breed
of Klan leaders in the 1980s, preferring fatigues over the traditional Klan
robe and training his troops in military tactics. Southern Poverty Law
Center sued Cross in the 1980s for running an illegal paramilitary group
and intimidating African-Americans. And after a court settlement in that
case barred Cross` KKK group from intimidation and paramilitary operations,
Cross started a new Klan group called the White Patriot Party, which of
course violated the court settlement.

Charged with criminal contempt, Cross did six months in jail, and
according to the SPLC, basically disappeared for a while once he was
released. When he finally emerged, he put together a hit list for an Aryan
terrorist organization and he even had a point system for each kill, one
point for those he described with the N-word, 10 points for white race
traitors, 10 points for Jews, 50 points for judges, and at the top of the
list, a kill worth 888 points was the man name Morris Seligman Dees, who at
the time headed up the Southern Poverty Law Center.

Joining me now to advance the story, the man at the top of that list
and founder of the Southern Poverty Law Center himself, Mr. Morris Dees.

Mr. Dees, you have basically been an adversary, a nemesis of this man
who is now accused of this horrific, horrific crime. How are you feeling?

MORRIS DEES, FOUNDER, SOUTHERN POVERTY LAW CENTER: Well, certainly, I
feel sorry, very sorry for the family that lost the lives of their loved
ones and those who were killed.

But in a way, we feel a bit lucky that he wasn`t closer to us, because
I think he would have turned his guns our way. In that case you`re talking
about, that criminal prosecution, Richard Cohen, who is my colleague at the
center, and myself, appointed federal prosecutors for the federal
government Miller for criminal contempt of court.

After the prosecution, while he was awaiting on appeal, Miller then
goes underground with some of his people, and a nationwide manhunt was
charged to put -- trying to find him, and I think because he said he wanted
to kill a federal judge and me too. He was found and brought to justice.

I think that something happened to Miller in this particular case. I
think that may explain maybe why he did what he did today. He cut a deal
with the federal prosecutors who were going after some other very violent,
racist neo-Nazi militants in the country. He testified against them. He
should have gotten 20 years in the case against myself and a federal judge.
But he only got three years for participating and helping the government.

And he became an outsider. None of the people in the hate movement
really paid him any attention. They thought he was a real traitor. And
today -- he could be doing this today because to gain himself some
recognition, saying, look, I`m stand-up guy. You guys are just talking. I
go out and kill people that I think are enemies of the white race.

HAYES: So this guy was at this point in his career as a neo-Nazi, as
a white supremacist, was viewed as a snitch, as someone outside the
movement who was actually not central to it at this point?

DEES: He definitely was not central to it, even though he had been
posting considerably on an Aryan neo-Nazi Web site, some 10,000 posts.

But he still hadn`t been accepted back in the movement. And he
represents, though, a lot of people we see in this movement today. You
know, the Southern Poverty Law Center has put out a business over 10 major
hate groups, including the Aryan Nations, bankrupted him.

But, today, we have a larger number of hate groups. They`re smaller
and meaner. They don`t have the hundreds and thousands of members like
Miller had in his organization. And these people are frustrated with the
changing demographics of America. They`re frustrated with Obama being the
president of the United States.

We just got -- we just saw on your show here the cattle farmer in
Nevada arguing that he shouldn`t have to pay rent to the federal
government. Look at the people surrounding him. Those people, I think,
represent the militia groups today that are increasing in number. We have
seen a whole lot of these killings by these people like Miller. We saw the
Jewish synagogue in Birmingham.

(CROSSTALK)

HAYES: Yes. I want to just stop you right there, because in terms of
the in terms of the trend, in terms of the amount of violent -- of violence
we see from white supremacists, from neo-Nazis, what does that landscape
look like? How common is something like this, as horrific as it is?

DEES: I think it`s quite common.

We have a group called the Sovereign Citizens who have killed seven
law enforcement officers in the last 10 years. They stop them on the
highway for something, they just shoot them and kill them. We have seen
the Buford Furrow situation where the guy was a member of a neo-Nazi group
that shot up a Jewish group in Los Angeles.

And we saw the guard killed at the Holocaust center by a guy who was a
Miller type, a long-term activist, and then the Sikh killing in
Minneapolis, where the guy that did the killing was a hard-core neo-Nazi
guy. These people are frustrated. The political divisions in our country
are frustrating them today, and they`re obsessed against Jews.

They think Jews are taking control of our government. And they see
Obama as just a pawn of the Jews. What`s ironic is that Miller here, going
after, trying to kill Jews, killed two Methodists and a Catholic, which was
tragic.

HAYES: Senseless in any case, I would say.

Morris Dees from the Southern Poverty Law Center, thank you so much
for your time.

DEES: You`re more than welcome. Thank you.

HAYES: Coming up: this weekend`s events at the Republicans` Freedom
Summit in New Hampshire warrant doing something we never do on this show,
playing sound from Donald Trump.

That, plus a conversation with one of the most well-connected GOP
campaign operatives out there, Steve Schmidt, is ahead.

(COMMERCIAL BREAK)

HAYES: All right, let me take you behind the curtain here. I was
going to start this segment off, straight off, by playing a sound bite from
Donald Trump, what we call in the business bumping back.

But I feel like that`s the kind of thing you should warn someone
about. So, consider yourself warned: Donald Trump coming right up.

(BEGIN VIDEO CLIP)

(APPLAUSE)

DONALD TRUMP, CHAIRMAN & CEO, TRUMP HOTELS & CASINO RESORTS: I heard
Jeb Bush the other day.

And he was talking about people that come into this country illegally,
they do it for love.

(BOOING)

TRUMP: And I said, say it again? I didn`t get -- that`s one I have
never heard of before.

I have heard a lot. I have heard money. I have heard this. I have
heard sex. I have heard everything. The one thing I never heard of was
love.

(END VIDEO CLIP)

HAYES: In case you were wondering what the ridiculous professional
troll`s take on immigration reform is, there it was.

But here`s the amazing thing about this particular story. It worked.
The audience in the room was with Donald Trump and sided with him over Jeb
Bush.

And what was that room? Well, it was that, that New Hampshire`s
Freedom Summit, sponsored, in case you couldn`t tell, by Citizens United-
and the Koch brothers-backed Americans for Prosperity, a little bit of a
pageant for all those 2016 wanna-be candidates.

Ted Cruz was there. So was Rand Paul. Mike Huckabee made an
appearance. And so did Marsha Blackburn, to name a few.

But if you want to reduce the dilemma facing the Republican Party to a
single moment, that was the moment, Donald Trump at the podium, because
that moment was a manifestation of an almost existential question for
Republicans. Does the conservative base of the party want to nominate
someone for president closer to Donald Trump or Jeb Bush?

Steve Schmidt, former senior campaign adviser to John McCain, one of
the most plugged-in GOP operatives out there, will join me next to discuss.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

MIKE HUCKABEE (R), FORMER ARKANSAS GOVERNOR: My gosh, I`m beginning
to think that there`s more freedom in North Korea sometimes than there is
in the United States.

When I go to the airport, I have to get in the surrender position.
People put hands all over me. And I have to provide photo I.D. and a
couple of forms and prove that I really am not going to terrorize the
airplane.

But, if I want to go vote, I don`t need a thing.

(END VIDEO CLIP)

HAYES: This weekend, Mike Huckabee, Rand Paul, Ted Cruz and other
potential 2016 Republican presidential candidates gathered at the New
Hampshire Freedom Summit, an event organized by Citizens United and
Americans for Prosperity.

That offered the 2016 contenders to tell the conservative base in an
early primary state exactly what it wants to hear. And that, of course,
just might be exactly the problem.

Joining me now, Republican strategist and MSNBC contributor Steve
Schmidt.

All right, Steve, here`s my feeling about watching this Jeb Bush
kerfuffle happen. The party has been locked at this impasse since all the
way back in 2006/2007, when your old boss, John McCain, tried to get
McCain-Kennedy passed. The whole thing blew up.

And I have been hearing for six or seven or eight years from
Republican insiders the establishment wants to get past this impasse. They
want some kind of comprehensive bill. And yet I look at where the base is,
and nothing seems to have moved.

STEVE SCHMIDT, MSNBC POLITICAL ANALYST: Here`s part of the
fundamental problem, Chris, that Republicans have, as you start to think
about 2016.

If you look at just the states that Democrats have won six out of the
last six elections, they have 242 electoral votes. That doesn`t count
Florida, Nevada, Colorado, New Mexico, doesn`t count Virginia, doesn`t
count North Carolina, doesn`t count Ohio.

And the fact is the electorate will be 2 percent less white in 2016
than it was in 2012, 2 percent less white, of course, than it was in 2008.
Mitt Romney gets 59 percent of the white vote, gets 191 electoral votes. A
generation ago, George Herbert Walk Bush hit that number, and he got 426
electoral votes, I believe.

So the country has fundamentally changed. And before we can talk
realistically about how to win the presidency, we have to talk about how to
realign that map, because it`s almost impossible to create a scenario where
the Democrats have a floor base of 242.

HAYES: And you know what`s interesting about that is, you can even
separate out rhetoric from politics. Right? You can say one way to do
that is just sound compassionate.

You don`t even have to support comprehensive immigration reform. You
could just say things like, look, I understand there`s a lot of
hardworking, decent folks who come to this country illegally for a better
life, but -- which is what Jeb Bush appeared to be doing. And that even
got -- gave Donald Trump a layup in front of that crowd to get easy laughs.

SCHMIDT: Well, look, I think that Jeb Bush to some degree is testing
the premise of what the market would bear.

HAYES: Yes.

SCHMIDT: I think he`s very seriously considering watching, looking at
running, and I think he`s looking to see what he can survive with, and so I
think that`s what that was about.

HAYES: That`s an interesting phrase, testing what the market will
bear.

On that theme, there`s an interesting piece by McKay Coppins over at
BuzzFeed. He was at the Freedom Summit. He wrote it up. He said, "No
sign of social issues as conservative leaders preach to activists."

And it reminded me of a very funny "SNL" Coachella skit about the GOP
branding itself for young people. Take a look.

(BEGIN VIDEO CLIP, "SATURDAY NIGHT LIVE")

UNIDENTIFIED ACTOR: We have got a whole new platform young voters are
really going to love.

UNIDENTIFIED ACTOR: For example, a lot of you out there are probably
in favor of gay marriage, right?

(CHEERING AND APPLAUSE)

UNIDENTIFIED ACTOR: We thought so. Well, you`re in luck, because the
new GOP is not going to talk about it as much.

(LAUGHTER)

(END VIDEO CLIP)

(LAUGHTER)

HAYES: That seemed actually -- that seemed actually pretty much right
on the nose, and definitely what was going on at the Freedom Summit.

SCHMIDT: Look, if you look at the polls, Chris, about 35 percent, 40
percent of Republican voters nationwide, distinct, of course, from the
elected leadership of the party, but about 40 percent of Republican voters
support marriage equality.

And the Republican Party is trending, albeit behind where the
Democratic Party is. Barack Obama, of course, just a few short years ago,
was against marriage equality. Opinions are changing very, very quickly on
it.

And there`s going to be a de-emphasis on some of these issues, I
suspect, with some of these candidates.

HAYES: MSNBC contributor Steve Schmidt, great pleasure to have you
on, man. I hope we can have you back.

SCHMIDT: You bet. Good to be with you, Chris.

HAYES: All right.

Coming up: a story of a bank busted for enabling a Mexican drug
cartel. Now, here`s the question. Do you think the bank faced criminal
prosecution? American justice in the age of inequality, I will talk about
it with Matt Taibbi.

That is next.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: It is a case that has everything -- everything
except an arrest. And that struck some as odd, because in an 80-page
document of court papers, the bank admits to almost going out of its way to
act as a financial clearinghouse for international pariahs and drug
dealers.

(END VIDEO CLIP)

HAYES: In late 2012, British banking giant HSBC accepted
responsibility for a wide range of criminal activities, including illegally
conducting hundreds of millions of dollars in transactions for Iran, Libya,
and other nations, and allowing Mexican and Colombian drug cartels to
launder more than $800 million in drug trafficking money.

(BEGIN VIDEO CLIP)

LANNY BREUER, ASSISTANT ATTORNEY GENERAL, DEPARTMENT OF JUSTICE
CRIMINAL DIVISION: These traffickers didn`t have to try very hard. They
would sometimes deposit hundreds of thousands of dollars in cash in a
single day into a single account, using boxes, as Loretta said, designed to
fit the precise dimensions of the teller`s windows.

(END VIDEO CLIP)

HAYES: The Department of Justice proudly announced the bank had
agreed to pay total of more than $1.9 billion, which was a record fine. It
amounted to just about five weeks` worth of income for the bank.

And there were no criminal charges announced for HSBC, a decision the
DOJ attributed to concerns that charges could jeopardize the bank and
potentially the entire global financial system.

(BEGIN VIDEO CLIP)

LOU DOBBS, FOX NEWS: He said, if authorities had pressed charges,
HSBC would almost certainly have lost its banking license in this country,
and that would have cost thousands of jobs.

(END VIDEO CLIP)

HAYES: Now, that line of thinking can be traced back to a 1999 memo
from then deputy Attorney General Eric Holder, instructing prosecutors to -
- quote -- "consider the collateral consequences of a corporate criminal
conviction in determining whether to charge the corporation with a criminal
offense."

In other words, try to avoid corporate prosecutions because they could
hurt people and institutions that had nothing to do with the crime, which
sounds reasonable, but that position came with its own collateral
consequences, which were made crystal clear in the HSBC settlement.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: We have two tiers of justice in this country, one
for everybody else, and one for institutions that are so big that they`re
deemed too big to fail.

And what it sends -- the message it sends to the other banks in a
similar situation is, hey, guess what, the normal mechanisms of criminal
deterrence don`t apply to us.

(END VIDEO CLIP)

HAYES: So while the HSBC executives did not have to face prosecution
or the prospect of jail time, the people actually using the sorts of
illegal drugs the Mexican cartels were selling, with the profits being
laundered through HSBC, well, they were being arrested at a rate of one
person every 21 seconds.

That double standard did not escape the attention of Senator Elizabeth
Warren.

(BEGIN VIDEO CLIP)

SEN. ELIZABETH WARREN (D), MASSACHUSETTS: If you`re caught with an
ounce of cocaine, the chances are good you`re going to go to jail. If it
happens repeatedly, you may go to jail for the rest of your life.

But, evidently, if you launder nearly a billion dollars for drug
cartels and violate our international sanctions, your company pays a fine
and you go home and sleep in your own bed at night, every single individual
associated with this. And I just -- I think that`s fundamentally wrong.

(END VIDEO CLIP)

HAYES: That story of HSBC is one of many chronicles of injustice in
the new book, age of inequality -- Matt Taibbi`s new book, "The Divide:
American Injustice in the Age of the Wealth Gap."

And Matt Taibbi joins me now here at this table.

Congratulations on the book.

MATT TAIBBI, AUTHOR, "THE DIVIDE: AMERICAN INJUSTICE IN THE AGE OF THE
WEALTH GAP": Thanks for having me.

HAYES: All right, so that story, that is a real we can call high-
definition story.

TAIBBI: Right.

HAYES: It wasn`t even they were doing something like, oh, they were
rigging some security you never heard of. They were just helping people
launder drug money.

TAIBBI: Oh, yes, this is a scene out of "Scarface," remember, when
all the guys were walking into the bank with the duffel bags full of cash
and walking out without the duffel bags? I mean, that`s exactly what they
were doing. It was drug dealers just depositing money in a bank.

HAYES: So, why wouldn`t we -- why is the collateral consequences
unreasonable? Lots of people work for HSBC who presumably had nothing,
absolutely nothing to do with them deciding to become essentially conduit
for drug smugglers.

And if you prosecuted them, you could imperil their jobs.

TAIBBI: OK, there are three reasons why it`s unreasonable.

The first one is, collateral consequences is meant to apply to
companies. In other words, if you -- it`s all about the decision on
whether or not to criminally charge a company, not the individuals at the
company. So we can understand the reason why you wouldn`t want to apply a
felony charge to an entire company like HSBC, which is one of the biggest
banks in the world.

But there`s no reason why you can`t charge a bunch of individuals for
laundering drug money.

HAYES: Right. Good point.

TAIBBI: The second one is, you can only make the excuse once, that
you`re too big to prosecute.

Really, what they should have done in that settlement is said, OK, in
exchange for us not tossing you all in jail now, you have to become smaller
so that the next time you do this, we can throw you in jail. And then the
third thing is, it`s morally unacceptable when one class of people pays a
fine to get out of monstrous crimes, and another group of people goes to
jail for those same crimes.

I mean, that same day, when they had made the announcement, I went to
court here in New York City where they announced this, and I asked, what`s
the dumbest drug case you had today? And they told me about a guy who got
47 days in Rikers just for having a joint in his pocket. Now, he paid a
bigger penalty than anybody at HSBC, and that`s just not right.

HAYES: Wow.

You do a really amazing job of showing that divide. Talk a little bit
more about, before we get to the people that are doing 47 days at Rikers,
that HSBC, it is the most egregious case. It`s the most -- it`s the
easiest to get the details of. But they`re not alone, right?

TAIBBI: Oh, no.

There`s -- there`s case after case after case of companies that are
getting away with financial settlements, often where they don`t have to
admit any wrongdoing at all.

But, last year, we saw J.P. Morgan Chase, they paid $20 million in
fines overall, and yet there were -- they somehow had enough leverage to
get $20 billion out of that company, but not enough leverage to have one
even individual do one day in jail.

HAYES: I mean, $20 billion, when you think about, like, what kind of
wrongdoing would you have to do to end up with $20 billion in fines? J.P.
Morgan Chase figured out a way to get there.

TAIBBI: Oh, and they were all over the map, everywhere from rigging
energy prices in a couple of states, to being Bernie Madoff`s banker, to
the London Whale episode. They were everywhere.

And we are -- it`s now essentially the law of the land that collateral
consequences is what we`re going to do when we deal with companies this
size.

HAYES: At the other end of the justice system, we have a justice
system that does an amazing job of taking people and making them criminals.

TAIBBI: Right.

Essentially, what we do is, we throw a net over low-income and
especially minority neighborhoods, and we -- especially with policies like
stop and frisk, we bring in everybody. What we`re really looking for,
ostensibly, are guns and warrants.

And if they don`t have those, we`re supposed to throw them back, but
we often don`t. We often proceed with ridiculous charges. I mean, I have
a guy in this book who I interviewed who was arrested repeatedly for what
they called obstructing pedestrian traffic, which is just being black on a
Tuesday night. That`s all it really was.

HAYES: On a street in which -- as the details are borne out in your
reporting, on a street in which no one was walking at that hour.

TAIBBI: It was 1:00 in the morning. The guy is a bus driver. He`s
coming back from work. He has got a tie on. He has got identification on.
He stops in front of his own house to listen to some music with a friend of
his with their headphones. And the police just didn`t like the look of
him, and they wrote them up for this.

HAYES: OK. So here`s the thing. I`m with you on all this. Right?
I`m convinced.

Convince me this isn`t just the way it`s always been, right? What is
new about this? Why should we be more concerned now? Is there a trend
that we should be worried about?

TAIBBI: So, what`s interesting about this is that, even in the early
years of the Bush administration, if we go back -- let`s go back even
farther first to the S&L crisis, which, compared to the subprime mortgage
crisis, paled in comparison.

But it was a major national fraud scandal. We put about 800 people in
jail after that crisis.

HAYES: Eight hundred people went to jail for the S&L crisis?

TAIBBI: Right. Right. And there were a significant of prosecutions
in that case.

Fast-forward to the next major financial scandal, which was the
accounting scandals in the early 2000s, right, Tyco, Adelphia, WorldCom,
Enron.

HAYES: Enron, right.

TAIBBI: Arthur Andersen.

Even the George Bush administration recognized the symbolic necessity
of going after the heads of these companies, because people need to feel
that justice is blind.

HAYES: Yes.

TAIBBI: Fast-forward again to the next round of scandals, and there
are no -- no prosecutions.

HAYES: Matt Taibbi, author of "The Divide," thanks so much for your
time.

TAIBBI: Thanks for having me.

HAYES: 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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