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'The Last Word with Lawrence O'Donnell' for Tuesday, April 15th, 2014

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THE LAST WORD WITH LAWRENCE O`DONNELL
April 15, 2014

Guests: Howard Dean, Jess McIntosh, Carl Foster

ALEX WAGNER, GUEST HOST: On your left, Mitch McConnell, she is
passing you on your left. And she is not the only one.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Overall, Republicans may be in the best position
they have been in years.

UNIDENTIFIED MALE: Blue grass politics, a little less snowy. There
is one place where Republicans are in bad shape.

UNIDENTIFIED MALE: Boy, that Kentucky Senate race is tight.

UNIDENTIFIED MALE: And that`s in Kentucky.

UNIDENTIFIED FEMALE: We`re talking about the minority leader of the
Senate.

UNIDENTIFIED MALE: One of the most powerful Republicans in
Washington.

UNIDENTIFIED FEMALE: Mitch McConnell.

UNIDENTIFIED MALE: The holy grail is Mitch McConnell.

UNIDENTIFIED MALE: People are just sick and tired of what goes on in
Washington, D.C. They`re tired of the dysfunction.

SEN. TED CRUZ (R), TEXAS: Mike Lee.

SEN. MIKE LEE (R), UTAH: I hope one day to be a pirate on the high
seas.

CRUZ: I am your father.

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: It`s important for us
as a party to tell us what you are for.

UNIDENTIFIED MALE: They had so many issues and so many problems.

BOEHNER: We are for getting rid of Obamacare.

UNIDENTIFIED FEMALE: Good news for Obamacare. The law will cost $5
billion less.

UNIDENTIFIED FEMALE: Five billion dollars less than projected for
2014.

BOEHNER: Whoa-whoa-whoa.

UNIDENTIFIED MALE: Back in February, Republicans attacked Democrats
over a CBO report. Now, the tables have turned.

BOEHNER: What the hell is this? A joke?

UNIDENTIFIED MALE: Democrats has some good talking points now.

UNIDENTIFIED MALE: Midterm elections generally skew older, whiter.

UNIDENTIFIED FEMALE: Every election is a base election.

UNIDENTIFIED MALE: They`re going to have to motivate liberals.

UNIDENTIFIED MALE: This does give Democrats a little sigh of relief.

UNIDENTIFIED MALE: It could be part of the law`s best two weeks ever.
Confetti falling down for some Democrats, I guess.

(END VIDEOTAPE)

WAGNER: I`m Alex Wagner, in for Lawrence O`Donnell.

Republicans may want to rethink their 2014 strategy if they want to
take back the Senate. Democrats seem to be shifting the tide in a handful
of critical races.

In Kentucky, Secretary of State Alison Lundergan Grimes announced
today that she has outraised Senate Minority Leader Mitch McConnell for the
second quarter in a row. The Grimes camp reported raising $2.7 million
compared to McConnell`s $2.4 million. While the senator has twice as much
cash on hand as Grimes, he also has a higher burn rate and has spent more
than $12 million already ahead of a competitive primary against Tea Party
challenger Matt Bevin.

Alison Grimes currently leads Mitch McConnell by half a percentage
point in a Real Clear Politics average of Kentucky polls.

There is also good news for Democrats in Arkansas, where incumbent
Democratic Senator Mark Pryor now holds a lead over his Republican rival,
Congressman Tom Cotton. In two polls in a row, Senator Pryor has a three-
point lead over Congressman Cotton -- 46 percent to 43 percent in the Talk
Business Hendricks College poll. And 48 percent to 45 percent in a poll
released by the Democratic Senatorial Campaign Committee.

Both polls are within the margin of error -- a sign that Congressman
Cotton may be just a little bit nervous -- he did what most defensive
candidates do. He called for a debate.

(BEGIN VIDEO CLIP)

REP. TOM COTTON (R), ARKANSAS: What are you saying, Senator Pryor,
you, me, alone, five times, all around Arkansas, no moderator, speaking
directly to each other, and to the voters?

(END VIDEO CLIP)

WAGNER: And in Louisiana, incumbent Democratic Senator Mary Landrieu
is proving you cannot count her out just yet in the race against Republican
front-runner, Congressman Bill Cassidy. In the latest poll conducted by
Republican-leaning Magellan Strategies, Senator Landrieu has a distinct
lead over all possible Republican challengers. Landrieu gets 39 percent
and Cassidy trails her by 13 points with just 26 percent support.

Joining me now, former governor of Vermont, Howard Dean, former head
of the Democratic National Committee. And Patrick Murphy, an MSNBC
contributor and former congressman.

Governor Dean, let me start with you first. You know something about
small dollar donations. The Grimes camp reports that more -- this sum that
they`re reporting today involves more than 45,000 donors hailing from all
50 states and all 120 Kentucky counties.

And yet, Mitch McConnell`s spokesperson issued a statement saying,
"The very same ultra-rich liberal elite who bankrolled Barack Obama into
the White House are pulling out all of the stops for Grimes, Kentuckians
known darn well her entire campaign is funded by those who seek to destroy
Kentucky values and our way of life and the only way they can accomplish
that is getting rid of the man responsible for stopping them Superman, aka,
Mitch McConnell."

Governor Dean, Mitch McConnell, talking about an ultra-elite party
controlling the purse strings. How deeply ironic is that to you?

HOWARD DEAN, FORMER DNC CHAIR: It`s a very interesting stuff. First
of all, Mitch McConnell has never been terribly popular in Kentucky. He
just doesn`t fit in. He did this, kind of acerbic, humorless approach to
everything. He`s not an easy going guy. That`s a problem.

The biggest problem, though, interesting enough, and, Alison Lundergan
Grimes comes from a Kentucky Democratic family, well known.

But the thing that is really killing Mitch McConnell I think is the
incredible success of -- of Kentucky Connect. They don`t call it
Obamacare, very smartly. But probably the best run in the country.
Governor Beshear is a Democrat and the fact that the people have health
care after all this time and Mitch McConnell did everything he could to
stop them from getting health care, that`s got to be a factor here.

You are going to see this all over the country. In fact, you already
are seeing this all over the country. A poll, folks suggested on the
offensive on Obamacare. We ought to be supporting it. We ought to be
proud that we supported it, it is in fact providing people with health
care. And nobody knows that better than the people of Kentucky.

This was a poor state. A lot of people uninsured. A lot of those
people have insurance. Not going to help Mitch McConnell.

WAGNER: Yes, I think 40 percent of Kentucky`s uninsured population
has now been insured through the exchanges.

DEAN: Yes, it`s extraordinary.

WAGNER: And Medicaid.

Patrick, I want to go to you more on the question of, money and
getting primary, because what McConnell/Grimes race would point to is
fundamental problem in the Republican Party which is the far, far right-
wing of the Republican Party. Mitch McConnell is burning through cash to
defeat a primary challenge from Matt Bevin, who is someone that suggested
that same-sex marriage may lead to a person defining themselves as married
to one of their children for financial benefits.

This guy is far, far right. And where McConnell should be focused on
Grimes, and her potential threat, he is distracted with Matt Bevin.

PATRICK MURPHY, MSNBC CONTRIBUTOR: That`s right. You are right,
Alex. What`s interesting -- not only does he have the tough primary fight
against Bevin. But Alison, as you know, Alison Grimes, she outraised him
this quarter and she`s up in the polls.

The governor is right. You know you look at Kentucky Connect. Health
care, the tide turned with Obamacare. People see it -- they scared the
living day lights out of folks in 2010. I was a victim of the Tea Party
wave in 2010. In 2012, it didn`t work. We picked up eight seats in the
House. We won re-election of Barack Obama.

And in 2014, they`re going become to the well. That dog is not going
to hunt. And we are going to see -- hopefully -- Mitch McConnell,
McConnell, finally taken down in Kentucky. This is like when they took out
unfortunately Tom DeLay. And this is -- the number one target on offense
for the Democrats, and I think it`s a good thing.

WAGNER: Governor Dean, to follow up on your contentions about the
ACA, "Politico" is reporting today some very, very good news for Democrats,
which is a strong March enrollment surge, along with indications that
younger and healthier people have begun signing up, had changed certain
attitudes around the country, insurers are considering expanding their
stake in the exchanges next year, bringing their, more of their business to
states and counties. And some health plans that skip the new market places
altogether this year are ready to dive in next year.

If you look at the numbers, what the CBO is projecting at this moment
is by 2017, there will be 36 million people enrolled in exchanges and in
Medicaid. This is an inevitability thing at a certain point. And yet --
the entire Republican arsenal is based on one cannon, which is the ACA.

DEAN: That`s what their gamble. It looks like they may have made a
mistake. There was a poll out that for first time in as long as I can
remember -- more Americans trusted the Democrats on health care than they
did on the Republicans -- than did Republicans. That can only mean that
the attack on Obamacare is not going to be successful, if the numbers
continue.

Now, this is early. But I have not seen the number like this, in at
least a couple of years. So -- I really do think it is possible the tide
is turning. I think Landrieu is going to win. I think Hagan is going to
win. I think Begich is going to win no matter what.

We`ve got some very good news from Arkansas tonight. We have got good
news in some of the other parts, Kentucky, obviously. So, the Senate is
very much up for grabs.

If the current trend continues, and this is a new trend, I think the
Republicans are in deep trouble. They put all their eggs in the basket for
Obamacare failing. They did everything they could to undermine it and
undermine the president. And it looks like the American people have
finally figured that out.

WAGNER: Yes, Patrick as the governor points out. I mean, the
political cycle is also long, right? At one point we thought the
government shutdown would be the final nail in the coffin for the
Republican Party. The Republicans are betting that the ACA the final nail
in the Democratic coffin.

There are months to go before November, and a lot could change in
terms of public opinion on the ACA. In terms of a shift in public opinion,
my question to you is -- how long does a resurrection take because Mitt
Romney`s first ad of the 2014 cycle will air on TV starting tomorrow. I
would like to play this ad for you and ask you whether any body at this
point benefits from having Mitt Romney in their television ad.

Let us listen in.

(BEGIN VIDEO CLIP)

MITT ROMNEY (R), FORMER PRESIDENTIAL CANDIDATE: The stakes are very
high in this election, because Washington`s spending is out of control.
You can take it from me. The choice for Congress is Mike Simpson. I know
because I have seen him in action. Mike is fighting hard every day to cut
Washington`s wasteful spending, to stop junk lawsuits and to fight against
Obamacare. We are going to win this battle. I hope you`ll join me and
strongly support Mike Simpson for Congress.

(END VIDEO CLIP)

WAGNER: Patrick, he`s back. But is it too soon?

MURPHY: I think it is a little too soon to be honest, Alex. They go
become to the tax and spend stuff. Wasteful spending. They didn`t want to
talk about the $5 trillion of the Iraq war, and that`s a conservative
estimate.

You know -- it just -- people -- have woken up to the same false
attacks. And I will tell you, this resurrection I think is a little
premature. And I think the American people spoke a few months.

WAGNER: It`s fairly unbelievable. Same old slogans, same old
sloganeer. Howard Dean and Patrick Murphy, thank you for joining me
tonight.

DEAN: Thanks, Alex.

MURPHY: Thank you, Alex.

WAGNER: Coming up, as Republicans try to shore up the female boat,
one of the party`s icons decided to weigh in economic security. And she
has a solution. It has a lot to do with marriage and lit to do with pay
men more. That`s next.

And later, while white-collar crime in the age of the financial
meltdown has gone unpunished, those caught in the criminal justice system
have not been as lucky. The author of "The Divide: American Justice in the
Age of the Wealth Gap", Matt Taibbi, joins me, ahead.

(COMMERCIAL BREAK)

WAGNER: Arizona Governor Jan Brewer signed a bill tonight that allows
state officials to conduct surprise inspections without a search warrant at
clinics where abortions are performed. Republicans say the clinics need to
be inspected without delays. Democrats say the bill opens clinics to
harassment. Prior to this bill, one warrant has been issued for an
inspection in the past four years.

Up next, new Republican outreach to the ladies and the conservative
woman who thinks women don`t really want equality. They just want a rich
husband.

(COMMERCIAL BREAK)

WAGNER: Republicans recently launched an initiative to recruit female
voters. They are encouraging candidates to put their wives and daughters
in campaign ad like this one.

(BEGIN VIDEO CLIP)

REP. VANCE MCALLISTER (R), LOUISIANA: Here in McAllister house, we
have a big family breakfast, every Sunday before church. Kelly does the
cooking. I do the dishes.

CHILDREN: Dad!

MCALLISTER: OK, OK. So, mostly, I do the eating. Here in this
house, that Kelly and I work and instill the values of faith, family and
country in our five children.

(END VIDEO CLIP)

WAGNER: One can safely assume the new Republican initiative does not
encourage that same Republican congressman to star in the video featuring
him making out with a female staffer who is not his wife.

This new Republican effort will quote focus on younger women in
suburban areas that lean blue. One can safely assume that Republican
efforts to recruit ladies who lead blue are not aided by 89-year-old
conservative activist Phyllis Schlafly who wrote this in an op-ed today for
"The Christian Post": "While women prefer to have a higher earning partner,
men generally prefer to be the higher earning partner in a relationship.
This simple profound difference between the sexes has powerful consequences
for the so-called pay gap.

Suppose the pay gap between men and women were eliminated, if that
happened, simple arithmetic suggests half of women would be unable to find
what they regard as a suitable mate. The pay gap between men and women is
not all that. It helps to promote and sustain marriages. The best way to
improve economic prospects for women is to improve job prospects for the
men in their lives, even if that means increasing the so-called pay gap."

Joining me now is Jess McIntosh, communications director for Emily`s
List.

Jess, it is hard for me to read that Phyllis Schlafly op-ed with a
straight face.

JESS MCINTOSH, EMILY`S LIST: It`s hard to listen to.

WAGNER: Yes, the offenses are almost too numerous to catalog in the
op-ed. I will read another choice nugget from that. Where Phyllis says,
"Women place a much higher value on pleasant working conditions. A clean
comfortable air conditioned office with congenial co-workers. Men, on the
other hand, are more willing to endure unpleasant working conditions to
earn higher pay doing dirty dangerous outside work."

I would argue, and I`d love to get your thoughts on this, that women
are often discriminated against in terms of hard labor jobs and more over
in this economy, women would be happy to take many jobs offered to them.
It`s just that a lot of them aren`t?

MCINTOSH: Oh, absolutely. The idea that women are sitting in air
conditioning offices deciding which cardigan to throw over the back of
their chair is just, entirely not reflective of the average American
woman`s working experience.

We take up just proportionate numbers of low income jobs. We`re the
majority of minimum wage earners. Women are working jobs up and down the
spectrum. We don`t typically go to college these days to get our MRS. And
we don`t typically seek out higher earning husband at the expense of our
own equal pay.

I would argue that if a man doesn`t want a woman to get equal pay for
equal work. She should not marry him. Moreover, she should not vote for
him.
And this is the problem with the Republican Party now. They keep
trying to rebrand to make the retrograde agenda palatable to the modern
21st century woman. But a new messenger will not do it. Having your wife
in the ad is not going to do it, having Phyllis Schlafly talk for you is
certainly not going to do it.

But they don`t have any substance to offer.

WAGNER: Well, and also -- I mean, Phyllis is endorsed and followed by
many people in the Republican Party. This is some one who basically
suggests that -- who does suggest, if a higher earning men is not available
many women are likely not to marry at all.

Pew reports that 40 percent of U.S. households are headed by women.
They`re the primary bread winners. This is the 21st century.

And yet the GOP seems unable to wake up from this coma that began some
where in the 1960s.

MCINTOSH: I mean, to be honest, even when Phyllis was speaking for a
broader spectrum of women, women still weren`t occupying that rarified
place that Phyllis and the GOP seems to think we are comfortable being in.
Women have traditionally been marginalized as folks pretend that we have
the soft cushy jobs and the husband to take care of us. That`s not reality
of American women. It`s certainly not the reality of American women today.

It was interesting to see these remarks come from somebody who is
known for being a spokesperson from another era, because they`re so in
keeping with what Republicans are saying every day, every week, right now.
I mean, just like a couple weeks ago, we had the spokeswomen come out in
Texas to explain Greg Abbott`s stance on equal pay.

And they were both, I don`t know their ages. But they looked to be in
their 30s. One said that women were extremely busy. That`s why they
didn`t care about equal pay. And the other said women should buck up and
be better negotiators like the men.

So, it`s not her age causing this. It`s the agenda of today`s
Republican Party.

WAGNER: It is literally an agenda that is so antiquated that it makes
"Mad Men" look like "2001 Space Odyssey" at certain points.

MCINTOSH: Yes.

WAGNER: Jess McIntosh from Emily`s List -- thanks for joining me
tonight.

MCINTOSH: Thanks.

Coming up, three resignations announced today in the wake of a Justice
Department report in the Albuquerque Police Department`s use of excessive
force.

And later, the relationship between income inequality and inequality
in the justice system. Matt Taibbi, the author of "The Divide" joins me,
just ahead.

(COMMERCIAL BREAK)

WAGNER: In the spotlight. Three of six members of the Albuquerque
Police Oversight Commission resign today in protest of the police
department`s use of excessive and deadly force, as the fallout continues in
the weak of the shooting death of James Boyd captured in this video.

Just a warning: what you are about to see is graphic.

(BEGIN VIDEO CLIP)

JAMES BOYD: All right. Don`t change up your agreement. I`m going to
try to walk with you.

OFFICER: All right.

BOYD: (INAUDIBLE) try to harm you. Keep your word. I can keep you
safe. All right?

Don`t worry about safety. I`m not a fucking murderer. All right.
I`m not going to harm. All right.

UNIDENTIFIED MALE: Get on the ground! Get on the ground now! Get on
the ground! Get on the ground!

UNIDENTIFIED MALE: Hey, buddy.

(END VIDEO CLIP)

WAGNER: Last month`s fatal shooting of Boyd, a homeless man, is an
indicator of why the Department of Justice has been investigating the
Albuquerque Police Department since late 2012.

This is what the DOJ found in its 46-page report released on Thursday.

(BEGIN VIDEO CLIP)

JOCELYN SAMUELS, ASSISTANT ATTORNEY GENERAL: In brief, we found that
the Albuquerque Police Department engages in a pattern of practice of
violating residents` Fourth Amendment Rights by using excessive force
during police encounters. Specifically, we found that officers used deadly
force in an unconstitutional manner. In fact, we found that some times it
was the conduct of the officers themselves that heightened the danger and
escalated the need to use force.

(END VIDEO CLIP)

WAGNER: The DOJ also issued a scathing assessment of the city`s
external review system concluding the all volunteer Oversight Commission is
powerless and independent review officer paid by the city and works with
the oversight commission is ineffective.

Quote, "From our view, it appears the review officer is more closely
aligned with the department than with the community that that review
officer serves. The review officer has failed to find violations of
department policy and in cases where it is more likely than not that
violations clearly occurred. The current review officer and her
predecessor have simply been too forgiving of the department any use of
deadly force. They thus deprive the department of critical opportunities
to correct its course which contributed to the overwhelming pattern of
unconstitutional use of deadly force."

In submitting their resignations, the three members of the Police
Oversight Commission all cited the same reasons, Albuquerque City
attorney`s office and independent review officer.

Joining me now is Ken Sanchez, president of the Albuquerque City
Council. And Carl Foster who serves on the Police Oversight Commission.

Carl, let me start with you today.

Three members of your committee resigned today. And in their letter,
they said that the situation is dysfunctional, whether the commission could
operate autonomously. They gave real pause to the efficacy of this group.

Why are you still serving on it?

CARL FOSTER, POLICE OVERSIGHT COMMISSION: Well, Alex, I serve on it
because I truly believe that the citizenry of Albuquerque needs an
independent outlet from which to express their concerns about the
Albuquerque Police Department. This commission does that in accordance
with the city ordinances that has been set forth by it.

WAGNER: So do you think there is any credence to the claims the
situation is dysfunctional and the committee isn`t operating as it should?

FOSTER: Well -- I`m very sorry that the three commissioners chose to
resign. We have a real opportunity as a commission to take a look at the -
- the recommendations from the -- from DOJ, and utilize these and
incorporate these recommendations into our system, in accordance with the
city ordinance. And these three commissioners would have been very helpful
members in this process.

WAGNER: Ken, let me ask you, as president of the Albuquerque city
council, what was your reaction to the fact that half of this commission is
departing and effectively saying they don`t want to be involved in a
whitewash?

KEN SANCHEZ, PRESIDENT, ALBUQUERQUE CITY COUNCIL: Alex, I am very
saddened by what has taken place. We have been through so much this past
week. With the report from the department of justice. And, I think these
members that have served on the POC did a very credible job. They are very
caring. They care about the citizens of Albuquerque. They took the
concerns very seriously and the reports. But they felt that they had no
power and no say so. And we as an Albuquerque city council are looking at,
making some major overhauls within the police oversight commission.

Currently, I hate to use the word dysfunctional. But I believe they
didn`t have the powers that they needed. There isn`t the transparency that
they need. Counselor Garduno, and counselor Brad Winter have introduced
legislation to reform and overhaul the police oversight commission. And I
think that is going to be done quickly. And the bill has already been
introduced. The public has had the opportunity to got a copy of the draft.

But we need some major changes within the police oversight commission.
And I admire each and every one of the individuals that, that have served
on this board. My commissioner that I appointed, Commissioner Dick Shine.
I think they did an incredible job in his work and tenure and time that he
was there. But we must move on as a city. And try to make the right
changes and to basically do what the department of justice told us to do is
lead to re-create a new citizens oversight commission.

WAGNER: Let me ask you though, Ken, in terms of actual police
department, you know, that video is deeply distressing. It is not only
graphic, but it is, it is distressing. And so far as -- I mean, these are
police officers shooting an unarmed man, a homeless man, with a history of
mental illness.

What do you say to the men and women of your city? What can you say
to them? to give them confidence that the police department will serving
the community and return to the roots of what policing is all about.

SANCHEZ: And that is one of the recommendations that the department
of justice has made that we need to go back to community based policing.
And again, that video is extremely disturbing. And I was, you know,
stunned by the chief of the Albuquerque police department to come out and
make statements that this shooting was justified and then to use case law
and Garner versus Tennessee to justify the situation. It is really
unfortunate that our chief would come out so quickly to justify the
shooting.

We have a crisis in leadership at city of Albuquerque. And we must
and we must immediately make these changes just as quickly as possible and
restore confidence to the men and women that represent and serve the
Albuquerque police department.

I know that it is a very tough and difficult job. And you know, it is
every day they go to work. You know, they want to come home to their
families. And at the same time, I think the most important part of their
job is preservation of life.

WAGNER: Albuquerque city council president, Ken Sanchez, and police
oversight commission member Carl Foster, thank you for your time tonight.

SANCHEZ: Thank you for having us.

CARL FOSTER, POLICE OVERSIGHT COMMISSION MEMBER: Thank you.

WAGNER: Coming up. Ukraine, declares a victory.

(COMMERCIAL BREAK)

WAGNER: Tensions between Washington and Moscow are reigniting as
Ukrainian forces claimed a small victory after days of pro-Russian
occupation of key buildings in Eastern Ukraine.

Ukraine`s acting president says Kiev`s forces have retaking control of
an airfield near the Russian border. But according to the BBC, it is not
clear when or even if pro-Russian separatists seized control of the air
base.

Gunfire was heard and Russian state television is reporting as many as
11 people were killed. But Ukrainian officials say they were no deaths.

Earlier today, hundreds of locals stormed the gates of the air base,
building barricades, shouting go home at Ukrainian military personnel. One
Ukrainian general had tried to speak with the crowd is forced back inside
the airfield gate unable to regain control.

Russia`s foreign minister is now threatening to back out of an in the
national conference in Geneva on Thursday.

Today, U.N. secretary-general Ban-Ki Moon spoke with Vladimir Putin
and urged him to de-escalate this actions. President Obama and Putin spoke
yesterday with the president warning there could be greater economic costs,
aka sanctions if Moscow does not back down.

Joining me now Kimberly Martin, professor of political science at
Barnard College at Columbia and David Rohde who is an investigative
reporter on foreign policy columnist for Reuters.

Thank you both for joining us.

KIMBERLY MARTIN, PROFESSOR, BARNARD COLLEGE: Thank you.

WAGNER: Kim, so Sergey Lavrov is a man of eminently quotable foreign
minister. And he said today, Ukrainian officials are spreading lies. And
he continues to deny Russia`s involvement in Ukraine. Just how complicated
is the situation by the fact that the Russians refuse to acknowledge they
are even there?

MARTIN: Everything is so complicated. Because the truth is we don`t
know who is there. We suspect that there are a couple of hundred of
Russian special operations forces that were especially trained to go into
Russia`s neighbors. We suspect that some of the people who are there are
locals who are, you know, honestly, holding the belief that they want to
have a -- autonomous relationship with the rest of Ukraine. And we suspect
that some of the people who appear to be civilians aren`t locals. And so,
we don`t know who is there.

WAGNER: But don`t we have some sort of evidence that there have been
phone calls back to Moscow. There are people speaking Russian there.
There is a presence that seemed distinctly Russian.

MARTIN: Well, but the thing you have to keep in mind is that there is
a significant minority of the local population that considers itself to be
ethnically Russian and speaks Russian. When the soviet union fell apart it
wasn`t neatly divided into different ethnic groups. So, it makes any kind
of action by Ukrainians, very difficult because on the one hand, they want
to be strong against any foreign Russian presence. But on the other hand
they don`t want to alienate Ukrainian citizens who are of Russian
ethnicity.

WAGNER: Well, and it is working in Putin`s favor, isn`t David? I
mean, this is -- and this is always a chess game. And it seems like it is
the chess game has become far more complicated. I will read an excerpt
from "the Wall Street Journal" which minces no word on the president`s
foreign policy.

They write, Vladimir Putin uses a Russian special forces to cow a
neighbor and steal territory while Mr. Obama agonizes about what to do. We
know Mr. Obama didn`t run for president to engage in great power politics,
but it still part of the job description. Is he interested in doing his
job?

Now, there has been plenty of criticism heaped on this president and
his foreign policy. But I feel like insofar he has had levers. he has
tried to pull them. Do you agree?

DAVID ROHDE, INVESTIGATIVE REPORTER, REUTERS: I do agree. And his
main lever, this economic sanctions are not very sexy, but they really have
driven down the Russian stock market. It is really is I think making
business people around Putin very nervous. And that is the tool they
should be using here.

Putin is very good at this. He is trying to create an incident. He
said today 11 people were killed. The Ukrainian government says no. It is
very important the Ukrainians, to me, not overreact and create a violent
situation that Putin can use as pretext to send in Russian troops.

WAGNER: Kim, as all things overseas, all, all, politics is local,
right? So, even though this is taking place thousands of miles away from
Washington, Washington has had plenty to say on this issue specifically.

I want to play sound from Senator John McCain who has not gone quietly
into the night. Let`s hear what he has to say.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R), ARIZONA: We ought to at least, for God`s sake,
give them some weapons with -- like weapons with which to defend
themselves. So far this administration has not only, not done that, but
they won`t even share some intelligence with the Ukrainian government. I
can tell you from my conversations with people in the government, they feel
abandoned by us. And, rightfully so. This is shameful.

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: I can say we are not
considering lethal assistance. We are obviously evaluating requests and
looking at ways that we can assort the Ukrainian government. But our focus
is on continuing to put pressure on Russia, YOU KNOW, we are not disusing
lethal assistance.

(END VIDEO CLIP)

WAGNER: We are not discussing lethal assistance, Kim. And one
wonders if lethal assistance in the mix would actually make the situation
better or worse. And I would also say to senator McCain`s point, John
Brennan was over in Kiev actually. So, if he is not sharing intelligence.

MARTIN: Sharing more intelligence than we used to be. But I think,
you know, Obama is doing the right thing by moving in a very steady,
forward pace without trying to do anything that would antagonize Putin too
much and cause Putin to have this incentive to go in with military force.

WAGNER: Well, and it would also help in -- in his argument, that the
U.S. is a sort of owner as western power trying to, you know, step where it
shouldn`t.

MARTIN: And I think it is important to keep in mind that we are
working very closely with the Europeans. And one very significant
development today is that a German gas company has decided to do reverse
flow of natural gas into Ukraine which is telling that people were very
concern about with this German natural gas companies that have the
relationship with Russia that goes through Ukrainian territory what they
continue to be allied with Russia. And therefore, create problems for
western unity.

And in fact, what we see is that there is movement coming from the
European side as well. So, you know, I don`t think a Republican president
to do, I don`t think a republican president or even John McCain. If he
were president, would be able to do anything more than what Obama is doing?

WAGNER: Well, and given, I mean, how much of the German economy is
dependent on Russian sources, it is pretty impressive that the president
got the Germans to ride with him.

MARTIN: Exactly.

WAGNER: But David, you know, all of this is inter comingle. There
are all kind of foreign policy thorns in this garden. And With the
Russians, we are also negotiating on Syria. There is new report -- there
are new reports out, not confirmed by NBC News, of, a gas attack and a
rebel held village in central Syria on Friday.

And the question is, you know, with all of this, it is delicate dance
with the Russian because if we alienate them too much, we lose any ground
we have on something like Syria which seems to be, and I love your thoughts
on this, more of a foreign policy priority than Ukraine.

ROHDE: It is. And then lurking behind all of this is the
negotiations with Iran. And that is where the Russians really can be a
spoiler. And I would argue that for Barack Obama`s legacy, he wants an
Iran nuclear deal. That`s frankly more important to him than Syria.

But what happened in Syria is essentially is Assad is winning. He is
turning the tide with conventional forces. There was this agreement to
remove chemical weapons which is slowly happening, it might now have a new
attack. But essentially, you know, Putin and Assad are winning in Syria.

This is the test for Obama. I mean, John McCain can say this. We are
not going to send the 82nd airborne into the Ukraine. And we are not going
to send it to Syria back to these economic sanctions. And the German, you
know, they need the Russian gas. But the Russians need German money.

Russian economy is dependent on gas sales to Europe. So again to me
this is this huge test of Obama`s talk of 21st century diplomacy. We are
all co-dependent on each other economically. Will economic sanctions lead
Putin to pause?

The economic sanctions on Iran, unprecedented, very strong sanctions
brought Iran to the bargaining table. Let`s see what happens with Russia.

WAGNER: That seems to be, what happens, dot dot dot. Seems to be the
running team for all of this.

Kimberly Martin and David Rohde, thanks for your time.

MARTIN: Thank you.

ROHDE: Thank you.

WAGNER: Coming up, if you break a federal law or don`t pay your
taxes, the government can send you to jail, or force you to pay up. But
according to journalist (INAUDIBLE), that does not apply to people who
break laws in CORPORATE America. (inaudible) joins me coming up next.

(COMMERCIAL BREAK)

WAGNER: We want to turn to some breaking news. We are getting
reports a South Korean Ferry off the country any southern coast, carrying
about 450 passengers is sinking. Witnesses tell South Korean media that
the boat has almost been completely submerged. Most of the passengers were
high school students on a trip. Navy and civilian vessels are reportedly
on the scene to help with rescue efforts.

For more, I am joined on the phone by CNBC correspondent, June Yoon.

June, what`s the latest that you know about the rescue efforts?

JUNE YOON, CNBC CORRESPONDENT (via phone): Hi, that`s right. A
passenger ship carrying 474 people on board started sinking off South
Korea`s southwest coast, a little more than two hours ago. The ship was on
the way to Jeju island. The passengers on board were mostly high school
students. Rescue operations are still going on right now. But according
to the latest that I have from the Korean coastguard here, is that all
student and teachers on board have been rescued. Of these, 324 students
and 14 students have been successfully rescued. The injured are being
moved to the closest hospital in (INAUDIBLE), this was because many
students weren`t wearing life jackets and waiting to be rescued right after
the ship was submerged.

About an hour and a half ago, there was a distress signal from the
ship, an announcement for all passengers on board to jump into the sea.
The president (INAUDIBLE) may has ordered the Navy and all members of the
coast guard to join a rescue effort since the submerged ship started
sinking.

So far, the students and teachers are OK. Crew members and other
people on board have not been accounted for yet. But rescue operations are
under way. Back to you.

WAGNER: Thank you, CNBC`s June Yoon.

Coming up, the wealth`s divide isn`t just about money, justice can
also depend on your job and your bank account. Matt Taibbi joins me coming
up next.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: People need to accept this program as a fact of
urban life. And right now, I`m standing in one of New York`s most crime
ridden neighborhood.

UNIDENTIFIED MALE: So, where exactly are you, Jess?

UNIDENTIFIED FEMALE: I`m on wall street. I`m on wall street. The
white Bronx. Business Harlem. And frankly, John, I don`t feel safe here.
And I would like to see the police do their freaking jobs and start
stopping people down here.

(END VIDEO CLIP)

WAGNER: That it took "the Daily Show" all of its 30 seconds to
capture to the egregiously unequal dispensation of justice in America is
frightening. Because what it really exposes is that we as a society are
fully aware there are two justice systems, one for business Harlem and one
for places like that neighborhood north of central park. And yet, the
systems persist. And they are the subject of Matt Taibbi`s book "the
divide American injustice in the age of the wealth gap" which starts with
some very basic statistics about just who is incarcerated in the United
States.

Our prison population in fact is now the biggest in the history of
human civilization. There are more people in the U.S. either on parole or
in jail today. Around six million total than there were ever at any time
in Stalin`s Gulogs. For what it is worth, there are also more black men in
jail right now than they were in slavery at its peak.

The book also points out who is not incarcerated in the United States.
Since 2008, no high ranking executive from any financial institution has
gone to jail, not one for any systemic crimes that wiped out 40 percent of
the world`s wealth.

Matt Taibbi joins me. He is also a journalist with First Look Media.

Matt, thanks for joining me.

MATT TAIBBI, JOURNALIST, FIRST LOOK MEDIA: Thanks for having me.

WAGNER: Such an important book. It is. And I feel like it puts, it
draws -- I mean, this is shocking disparity between what happens to
corporations and corporate executives and what happens to minorities and
people at the bottom of the economic ladder. Why still to this day has no
one been arrested?

TAIBBI: Well they give all kind of excuses. And you know, I spent
years and years and years working on this book. And I heard every excuse
in the book they tell you, prosecutors. And people in the justice
department and regulatory agencies will tell you, these cases are hard to
bring. Juries don`t understand them. You may devote lots of resources to
the cases and still lose. It might take you ten years to get into court.
And why proceed with a costly prosecution when you can just get two, three
billion dollars in a settlement anyway. What`s the harm in that?

But the problem is that all the arguments collapse when you compare it
to the fact that other people are going to jail. So if you have people
committing serious crime, especially fraud, for which poor people go to
jail all the time for welfare fraud. None of those arguments make sense.
They`re just morally unacceptable.

WAGNER: Well, but it is also, you know, what Eric Holder suggested
when asked by why, they haven`t more aggressively pursued, crime at the
executive and corporate level in some of these banks, is that it would have
a negative impact on the national economy. And you talk about collateral
consequences and how that informed that line of thinking. Tell us more
about that.

TAIBBI: Right. So this is way back when Eric Holder was deputy
attorney general in the Clinton White House where he wrote a memo that
affectionately became known as the Holder memo where he outlined this
policy of collateral consequences. And basically all it says is that if
you are targeting a big company that employs a lot of people, you the
prosecutor are worried about innocent victims, maybe shareholders, or
executives involved in wrongdoing or the community where the company is
based. You may consider other remedies like non-prosecution agreement
funds, deferred prosecution agreements. And you know what? That actually
makes a lot of sense. We don`t necessarily want to destroy a venerable
company that employs a lot of people.

But the problem is you can really only make that argument once. If a
company is too big to prosecute, part of the settlement should be that that
company has to break up in the smaller pieces, so that next time they do
something terrible like HSBC which laundered $850 million drug money. Next
time you should be able to throw them all in jail. I mean, there is no
reason you should allow these companies to remain too big to prosecute.
That`s just not acceptable.

WAGNER: Too big to jail. The other thing that you did that I think
is really important as you talk about the criminal justice system and the
disenfranchisement inherent in that. You also talk about, and I think,
this summed it up, you say the punishment is the process. Explain what
that means?

TAIBBI: Well, and especially here in New York City, I learned about
all these different ways that they pressure people to, to plead to crimes
that, you know, that may seem minor, but people end up with record. And it
affects the rest of their lives.

For instance, here in New York City, there is a speedy trial law that
says you should be -- should have your case dismissed or go to trial within
90 days. But prosecutors can use a little trick. They call it filing a
certificate of readiness that allows them to basically delay cases for,
for, infinitely way beyond the 90 day limit. So you may be waiting in jail
for a misdemeanor case for far longer than you would be actually be
sentenced even if you are convicted. So people end up pleading to these
crimes all the time even when they`re not guilty and that`s very serious
thing.

WAGNER: And then once you are up streamed into this, the criminal
justice system, and basically it means your chances of economic survival or
attention are quashed effectively. Is that --?

TAIBBI: Yes, of course. I mean, once you have been convicted of a
crime, it is almost impossible to get a professional license of any kind.
You have no access to public assistance of any kind. If you get caught for
something like welfare fraud, your relatives may lose their (INAUDIBLE)
housing. I mean, the consequences are far and wide from everybody who gets
caught up in the criminal justice system.

So these things that started off as minor infractions like, maybe
people getting arrested for, for, riding the wrong way down a sidewalk, on
a bicycle, or having a joint in your pocket or something like that. They
can turn into major life altering things pretty quickly.

WAGNER: Really quickly, you know, Rand Paul has been talking about
changing sentencing requirements. Do you feel like there is bipartisan
support to fix parts of our justice system at this point, more so than
before?

TAIBBI: I do because the cost issue is becoming an issue. And I
think there is bipartisan realization that, throwing huge numbers of people
in jail for especially for nonviolent offenses is totally socially
counterproductive. And even America is smart enough off to figure that out
eventually.

And I think we are in a situation now where the contrast is so stark
that we have to figure it out. This is just too much crisis otherwise.

WAGNER: And you outline that, contrast very well in the book, "the
Divide." Read it, everyone. The book again "the Divide."

Matt Taibbi, you get tonight`s last word. Thanks for your time.

TAIBBI: Thank you so much, Alex.

WAGNER: I`m Alex Wagner, in for Lawrence O`Donnell. You can catch my
show "Now," Mondays through Fridays at 4:00 p.m. eastern right here on
MSNBC.

Chris Hayes is up next.

END

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