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All In With Chris Hayes, Tuesday, June 17th, 2014

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June 17, 2014

Guest: John Kirby, Joe Wilson, Barbara Lee, Wendell Potter, Elon Musk

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

Big news today in the case of four Americans killed in the U.S.
consulate in Benghazi, one of the alleged ringleaders in that attack, Ahmed
Abu Khattala, was apprehended by U.S. Special Operations Forces. He`s
being transferred back to the U.S. where he will face criminal charges for

In the case of the murder of those four Americans, which is what the
actual Benghazi attack was about, this is probably the biggest break in
that case thus far. There`s even new credible reporting from "The New York
Times" confirming what the White House and Susan Rice initially said about
the attack in the days after it. That it was motivated by the
controversial American-made anti-Islamic online video.

But there is also the world of #Benghazi. The Internet, right wing
media, geopolitical led world of total obsessive conspiracy theorizing and
delusional paranoia. And on the day of the biggest break in actual
Benghazi case, the media face of #Benghazi wasted no time whatsoever
sliding into a fevered bit of speculation.


UNIDENTIFIED FEMALE: This is somebody that was quite boastful in the
papers. He was seen outside in a luxury hotel drinking a strawberry
frappe, talking to a "New York Times" reporter talking about his
involvement and not fearing at all the United States was going to get him
or the authorities.

UNIDENTIFIED FEMALE: You have the former secretary of state in the
middle of a really high-profile book tour and I think this is convenient
for her to shift the talking points from some of the things that she`s been


HAYES: That`s right. Implication that former Secretary of State
Hillary Clinton #Benghazi`s premiere target is being saved by the capture
of Khattala. After all, Clinton was interviewed on FOX News this very day.
In a moment, we`ll be speaking to someone who knows a thing or two about
being the target of politicized national security scandal.

But first, the capture of Ahmed Abu Khattala, long suspected of being
one of the masterminds behind the September 11th, 2012 attack on the U.S.
consulate in Benghazi. Khattala was apprehended by U.S. Special Operations
Forces comprised of U.S. commandos working with the FBI. He was actually
captured on Sunday. He`s now in custody and is being transported on the
USS New York back to the United States.

President Obama today remarked on the significance of this capture.


my absolute commitment was to make sure that we brought to justice those
who had been responsible. When Americans are attacked, no matter how long
it takes, we will find those responsible and we will bring them to justice.


HAYES: It appears Khattala will be tried in a civilian court based
upon the three-count criminal complaint filed last July by the FBI,
including killing a person in the course of an attack on a federal
facility, providing material support to terrorists resulting in death, and
possessing and using a firearm during a crime of violence.

Pentagon also announced that all U.S. personnel involved in the
operation have safely left Libya.

Earlier today, I spoke with Rear Admiral John Kirby. He`s press
secretary of the Pentagon and I asked him what happened to make this
operation come through now.


the result of months and months of hard work and dedication but an
interagency team, the intel community, law enforcement, and, of course, the
military. And it was a very successful operation. Lot of work and a lot
of bravery and courage went into this.

And you don`t -- you don`t only to a conclusion like this in such a
complicated, complex environment without a lot of preparation. So, you
know, I know it seems like it took a long time, but these kinds of things
sometimes do take a long time to reach this kind of conclusion.

HAYES: There`s reporting to indicate that this was on the president`s
desk waiting to be authorized and was not authorized out of concerns for
the diplomatic blowback there might be in Libya. Is that the case?

KIRBY: Well, look, I don`t -- I don`t want to get into any kind of
diplomatic discussion here. The point is, and the thing that people need
to remember is that this is a very bad individual and he`s no longer
walking the streets. He`s in U.S. custody and he`s going to stand trial.

HAYES: Is there precedence for a joint operations forces, FBI
operation like this to apprehend a suspect in a foreign sovereign nation
such as like what we have seen? Is this unprecedented or have we done
stuff like this before?

KIRBY: Well, without getting into the details on too much operational
stuff, absolutely. We`ve done these kinds of things before. Working
closely with law enforcement and the intel community across the military.
This is not unprecedented. This was the result of a lot of great teamwork
and preparation, again, over a long period of time.

HAYES: What is the legal architecture that authorizes this? Whey I
why is it legal to go into the sovereign nation of Libya to do this?

KIRBY: Well, look, I`m not a legal expert, but certainly, the
president has constitutional authorities, commander-in-chief, to protect
American citizens abroad, to protect the United States military, and, look,
this individual, alleged individual was a key figure in the Benghazi attack
where American citizens were killed and he belongs to an organization that
clearly represents a threat to American interests. So, I think there`s --
certainly this was definitely a lawful operation and in the keeping with
our best national interests.

HAYES: Ahmed Abu Khattala, the man in question, the suspect that you
just mentioned, whose custody is he currently in? Is he in FBI/DOJ
custody? Is he in the custody of the U.S. Armed Forces?

KIRBY: He is in U.S. custody, in a secure location outside Libya, and
clearly law enforcement personnel are with him as we speak.

HAYES: Has he been notified of his Miranda rights?

KIRBY: I`m not going to get into the judicial process. I really
shouldn`t go there. I can just tell you that he is in U.S. custody and
obviously we want to take the opportunity to talk to him and it wouldn`t
surprise anybody, shouldn`t surprise anybody that we`re going to try to
glean as much information as we can out of him.

HAYES: Is there any information you can share about how he`s being
designated in terms of the legal process? Because, obviously, we`ve seen
since September 11th there`s been a very murky area legally of whether
we`re dealing with the laws of war or dealing with domestic criminal law
when it comes to certain people who have been apprehended and brought into
U.S. custody? Is there definitive information you can share about how he
is designated, how the U.S. views him? Is she essentially a U.S. criminal
suspect, a criminal suspect under criminal law?

KIRBY: He has been charged and you can look at the charge sheet that
the Justice Department has posted online. He`s been charged with some
pretty serious crimes, and he`s going to travel to the United States to
stand trial for those crimes.

HAYES: Rear Admiral John Kirby, spokesperson for the Pentagon --
great thanks.

KIRBY: Thanks.


HAYES: Well, conservatives, FOX News host, and pundits reliably
complained about trying Khattala in a civilian court, the most tantalizing
#Benghazi nugget for them, again, was the timing of the capture.


UNIDENTIFIED FEMALE: If you knew where this guy was, if you`ve known
where Bowe Bergdahl was, why is it being used to change the narrative of
certain stories? You know, it`s twofold. One perhaps it`s a political
motivation on the part of the administration.

UNIDENTIFIED FEMALE: But the timing sure is interesting, isn`t it?

UNIDENTIFIED MALE: I wouldn`t put it by them, you know, timing this
capture. The guy obviously was easy to capture. Let`s wait and capture
him when it`s -- when the going gets tough.


HAYES: The motivation for the attacks has also been an obsession of
the world of #Benghazi and today in "The New York Times", David
Kirkpatrick, while serving the multiple sources of information on that
subject, brings a new scoop on the motivation of the alleged ringleader who
was captured and in is custody today.

What he, Khattala, did in the period just before the attack has
remained unclear but Mr. Abu Khattala told other Libyans in private
conversations during the night of attack that he was moved to attack the
diplomatic mission to take revenge for an insult to Islam in an American
made online video.

If that sounds familiar, it`s because it`s precisely what Susan Rice
and the White House said in the wake of the attack. In other words, they
were exactly correct about the motivations for the attack. One of the many
reported facts on the ground that never seemed to penetrate the #Benghazi

As for the #Benghazi FOX News Hillary Clinton interview, all those who
knew what, when questions were asked and Hillary answered them all again,
as well as highlighting the effort that really mattered.


country, and I think what was made abundantly clear by this latest effort,
is we have an unwavering commitment to go after anyone, no matter how long
it takes, who is responsible for harming Americans. And everybody around
the world who thinks about that, plans that, needs to know that will be the


HAYES: Joining me now, former ambassador, Joe Wilson. He was a U.S.
diplomat in Iraq under Saddam Hussein from 1988 to 1991. His wife was
outed as a CIA agent after he wrote an op-ed publicly debunking the claim
George W. Bush had made about Iraq`s weapons program. He`s the author of
"Politics of Truth."

Joe, I`d like to hear your reaction to watching the #Benghazi world of
scandal continue to cycle despite the fact it has been factually debunked.

they just make things up. That`s very clear. And the problem with all of
the flapping of the gums by the right wing echo chamber and by their allies
up on the Hill is it undermines our ambassador`s ability to do the work of
our country.

If I`m an ambassador and there and I have to worry about what Darrell
Issa, or Lindsey Graham, or John McCain are going to say if an operation
goes bad, then I may not be inclined to do my job which is to reach out and
meet people who may not be that friendly to me.

On a second note, let me say personally, and I think a lot of my
colleagues in the foreign service share this view, I think that what they
have done with their money-raising campaigns and their slander campaigns,
they have dishonored the memories of four of my former colleagues including
one Glen Doherty with whom I served on the advisory board for the military
religious freedom foundation. I think it`s absolutely scandalous.

HAYES: You as someone who worked in the foreign service and worked in
incredibly risky environments, are you satisfied the person today who`s
allegedly responsible for this has actually been apprehended, going to be
tried in U.S. criminal court?

WILSON: Sure, that`s what we do. Guantanamo is an aberration. You
pick up a criminal, you try them in federal court. That`s what we`re
supposed to do. We are a nation of laws.

And by doing things like holding people in detention without the
benefit of trial, it`s a violation of those laws.

HAYES: Ambassador, you`re someone who found himself with a bull`s-eye
painted on you and was subject to a tremendous campaign of character
assassination and smear jobs. What is it like to two through that, and
have you been thinking of that experience as you`ve been watching the Bowe
Bergdahl coverage, and also the way that Hillary Clinton has found herself
under fire on this particular topic?

WILSON: Oh, absolutely, sure. It`s the same mythology, it`s the same
slander, it`s the same libel, disregard for the truth, disregard for any
sort of public discourse at all. It`s really sort of high school bullying
except that the states are of national and international consequences.

HAYES: What does it feel like to find yourself as the subject of this
kind of thing? Because I think to myself as I watch someone take their
turn in the spotlight under the kind of scandal machinery of the right,
what the internal experience of it is like.

WILSON: Well, I think it`s disorienting, frankly. You`re put in a
position where you either run and hide like John Dilulio did, President
Bush`s former religious and faith adviser. When he called him little
Machiavellis, they drove him underground.

In my case, it was you either fight or you flee. And we decided to
stand up and fight.

HAYES: One of the things that came out today in the reporting on this
is -- and I think about Susan Rice who found herself in that position
initially, as sort of fall person in this scandal, is that what she went
out and said on the Sunday shows, which was the initial precipitating
condition of the scandal, which is that basically the video as the best
intelligence indicates the video was the inspiration for the attack, all
this time later when we apprehended the person that was allegedly
responsible, that that was actually right.

Do you have faith that that truth will actually get rid of the bubble
of speculation that has built up over this?

WILSON: Yes, surprise, surprise. At the end of the day, they savaged
Susan Rice for a set of talking points that were delivered to her by David
Petraeus and the CIA and they, you know, cost her her chance at being
secretary of state as a consequence of that.

It is really dishonorable what these people are doing up on the Hill.
And the right wing echo chamber.

HAYES: Finally, as someone who served in Iraq, as someone who served
in Iraq in, right on the eve of the first Gulf War, I have to ask what your
reaction is to watching that country come apart in the violent fashion it
is right now.

WILSON: Oh, it`s heartbreaking. It`s heartbreaking. I was back
there in September of 2010. There were still 40,000 U.S. troops there.

Baghdad was a garrison city that I didn`t even recognize and my
security detail wouldn`t let me go one block off the main road either to go
see the former embassy that I headed or see the residence I used to live
in. By the time -- when I got back there in 2010, the neighborhoods had
already been ethnically segregated. There were concrete barriers and
checkpoints. You could not get from one neighborhood to another.

It was a city -- even then teetering on the brink. So, for John
McCain to somehow say that we had won the war, he`s living in fantasy land.
It was a time bomb waiting to go off and it`s now gone off.

And my view is, we should just stay out of it. We`ve killed enough
Arabs for a lifetime.

HAYES: Former Ambassador Joe Wilson, thank you so much.

WILSON: Thank you, Chris.

HAYES: Coming up, we`ve been talking about all the people who got it
wrong the first time around with Iraq. Tonight, we`re going to talk with
someone who got it right and get her take on what`s going on there now.
That`s next.


HAYES: Coming up, Tesla, it`s a revolutionary electric car company
that I am frankly kind of obsessed with and I got to talk to the company`s
co-founder today. We will have that for you, ahead.


HAYES: It is now apparent to just about everyone who`s watching that
there is a deep sectarian division that is driving the chaos in Iraq. The
group we`ve been showing you pictures of, these guys with the black banners
who are pretty terrifying dudes, they are Sunni extremists who have been
targeting the Shia population in Iraq. In fact, they claim to have carried
out a mass execution of 1,700 Shiite soldiers over the weekend near the
city of Tikrit.

And what they are trying to do is polarize a country even more along
sectarian lines. That`s why you release images of a mass execution to
shock and terrify people into choosing sides between Sunni and Shia.

Unfortunately, it seems to be working. Today in Iraq, over 40 Sunni
detainees were reportedly shot in the head and chest by Shiite militias
north of Baghdad. While a car bomb in a Shiite neighborhood of the capital
killed 12 and wounded 30.

The devastating return to sectarian violence has been overseen and
enabled by this man, Nouri al Maliki, Iraq`s Shiite prime minister, U.S.
handpicked I should add, who has consistently antagonized and marginalized
Sunnis in Iraq. And in a massively unhelpful move today, al Maliki`s
government added fuel to the fire by declaring a boycott of the country`s
Sunni political bloc and cracking down on officials he considers to be
traitors. Probably not the kind of effort President Obama was looking for.


OBAMA: Any action that we may take to provide assistance to Iraqi
security forces has to be joined by a serious and sincere effort by Iraq`s
leaders to set aside sectarian differences.


HAYES: Just a few hours later, Maliki did a 180, calling for unity in
a joint press conference with Sunni and Kurdish leaders that was described
as visibly uncomfortable.

And while the prime minister struggles to hold this country together,
ISIS continues its advance towards Baghdad. Militants have at least
partial control of more than 10 Iraqi cities and they`re closing in on
government-held cities to the north of the capital. One of those cities
under ISIS control is Baiji.

It`s home to Iraq`s largest oil refinery, one of only three in the
entire country. It was shut down over night as the insurgents swept
through the city. President Obama will host congressional leadership at
the White House tomorrow to consult on how to deal with the crisis. And if
leaders in Washington are struggling to figure out what to do about the
Sunni/Shia divide, well, you can`t blame them. After all, the people who
concocted the war more than a decade ago told us this type of conflict
didn`t even exist there.


differences that suggest peace-keeping requirements in Iraq might be much
lower than historical experience in the Balkans suggests. There`s been
none of the record in Iraq of ethnic militias fighting one another that
produce so much bloodshed and permanent scars in Bosnia, along with a
continuing requirement for large peace-keeping forces to separate those


HAYES: Well, there were none until we showed up. But the chaos and
violence and destabilization we`re seeing in Iraq don`t come as a surprise
to people who originally opposed the war precisely because they feared
something like this would happen.

For instance, Congresswoman Barbara Lee.


REP. BARBARA LEE (D), CALIFORNIA: I rise today in opposition to this
opposition authorizing a unilateral first strike against Iraq. Such an
action could destabilize the Middle East and set an international precedent
that could come back to haunt us all.


HAYES: And Congresswoman Barbara Lee, Democrat from California, joins
me now. She is the only member of Congress to vote against the
authorization for use of military force after 9/11. She also voted against
invading Iraq in 2002. She just offered an amendment to repeal both of
those pieces of legislation.

Congresswoman, thank you for joining me.

LEE: My pleasure.

HAYES: What is your reaction now to watching many of the architects
of the Iraq war come forward to offer their advice about the latest crisis?

LEE: Well, let`s hope that they remember history. And we do not want
history to repeat itself. Too many of our young men and women paid the
supreme price. They did exactly what we asked them to do, $1 trillion-

So, Chris, what I have to say is this. I`m glad that the president is
being very cautious in his response and looking at all alternatives. But
when the resolution to authorize force against Iraq came forward, I offered
an amendment to that resolution that said let`s hold up, let`s let the
United Nations complete its inspections process. Because we have to
remember, once again, we were told there were weapons of mass destruction.
There were no weapons of mass destruction in Iraq. And so, minimally, we
should have allowed the inspections process to move forward, to be

Had we done that, I only got 72 votes for that amendment, Chris, but
had we passed that amendment, allowed that to happen, I don`t believe we
would be where we are now. The invasion caused the sectarian violence. It
caused us to be where we are now. And now, this is the regional conflict
that in many ways our invasion started.

HAYES: You`re proposing an amendment now to the defense
appropriations bill that would bar combat troops from entering Iraq in this
current crisis. Are you getting many takers on Capitol Hill for that?

LEE: Well, I believe there are many members of Congress who want to
see my amendment which is just basically says no funds will be allowed to
be used, no taxpayer dollars to fund combat operations in Iraq. We`ll see.
The Republican Tea Party, of course, controls what gets to the floor, but
let`s hope that there`s a debate. Let`s hope that we can get it to the
floor and talk about it.

And also, I`m trying to repeal the authorization that allowed the war
to take place, shock and awe, if we remember that, and also the 2001
authorization to use force.

So, I`m asking, Chris, the public to please sign up at because we need to hear an outpour of support for these
amendments because members of Congress will respond to what their
constituencies say. So, that`s

HAYES: Let`s talk about the second of the two authorizations. I
think it will comes as a surprise to most people the authorization for the
use of military support, authorizing military force in Iraq, is still the
law of the land. It`s never been repealed, even though the war has ended,
even know we`ve declared the war over.

That is still the controlling law. There is still authority vested by
Congress and the president to wage war in Iraq if he so wants. Isn`t that
the case?

LEE: That`s the case. And Congress needs to reassert its
constitutional authority and repeal this and then begin a debate again with
regard to the use of force and what congress believes should be the
appropriate response.

And I have to tell you, Chris, we have the farm bill. We have
transportation bills. They all have end dates. They never go on for 12 or
13 years.

The 2001 authorization, which has been used as the congressional
research service has indicated over 30 times for drone attacks, for
Guantanamo, for indeterminate sentencing, for wiretapping. For all of the
issues that we are so worried about in this country. That resolution has
been used as the legal basis and legal justification. And so, I think it`s
time to go back to the drawing board on the 2001 AUMF and the 2002 Iraq

As you said, the majority of the American people don`t know those
resolutions and those authorities are still in place. So, we have to put
Congress back in the mix and exercise a constitutional authority and begin
to really have a real debate.

HAYES: Given republican control of the House of Representatives, and
their expressed skepticism toward White House power, towards President
Obama, you would imagine you might find some takers across the aisle. We
will see if that bears out.

Congresswoman Barbara Lee, thank you so much.

LEE: Thank you, Chris.

HAYES: All right. We mentioned that Iraq`s largest oil refinery has
been shut down. The effect this new crisis will have on gas prices around
the globe is yet to be known.

You know who was less worried about that today? People who own
electric cars. Tonight, I`ll talk to Elon Musk, the founder of Tesla
Motors, about his mission to innovate our way off fossil fuels. That`s
coming up.



You guys were great. Just spectacular.



BIDEN: Great to see you. Are you kidding me? This is a kick, man.


HAYES: Vice President Joe Biden was in attendance yesterday at the
incredible U.S. victory over Ghana in the World Cup. As you see, he worked
the locker room afterwards. It was Joe Biden doing what he does best,

That victory for the U.S. men`s team was a perfect encapsulation of
why World Cup soccer is so exciting to watch. America scored 30 seconds
into the game, sixth fastest goal in World Cup history, then spent the next
82 minutes getting their butt kicked, but still managing to hold off an
equalizer from Ghana, until Ghana tied it up.

And then miraculously, against all odds, this happened. What you see
there are people in Kansas City watching as American John Brooks headed the
winning goal into the net moments after he came off the bench as a

And that wasn`t the only place masses of people have been congregating
to watch these games. In Chicago`s Grant Park, there was a similar scene.
Yes, that`s an awesome one. And in Portland, Oregon, a newscast
accidentally caught the moment live.


UNIDENTIFIED MALE: Come on down to 21st with (INAUDIBLE) we got tons
of great places to watch.


UNIDENTIFIED MALE: How about that? How about that?


HAYES: As you can see, their man on the ground was prepared, busting
out the USA jersey. It was a smooth move, dude.

All those people chanting "USA, USA" yesterday. I was one of them
cheering in my office right before this show started. I actually forgot
that I had to do the show for a moment and then hustled down here very late
to the chair.

And that, I submit, is what`s great for the World Cup. Everyone is
rooting for their country`s team and it brings out this kind of national
pride, but at the same time, that national pride is part of a larger
universal experience shared across the globe, because there are people in
cafes and parks from Rio de Janeiro to Accra to Tokyo, even outer space,
where people are just as proud of their own country, rooting just as
loudly, celebrating just as festively when their team scores a goal as you
are celebrating your own team.

And somehow it manages to make us all feel like we`re doing this
together across the globe, even as we pull for our guys to kick the other
team`s butt. So, if you haven`t had a chance to watch the World Cup or you
just don`t like soccer that much, still, go find a place where there`s a
big crowd watching and join them. You won`t regret it.


HAYES: Next week, "ALL IN America" is back with a new lineup of
original stories, behind the color line.

Now, over the weekend, I was in North Carolina reporting on one of
those stories we will be bringing you. And I spent time in a small town
with a conservative Republican mayor who is absolutely furious with the
Republican state government in North Carolina refusing to expand Medicaid.

And I would like to hereby predict that we will see more and more of
this Republican backlash to the backlash on Medicaid expansion. If you
don`t believe me, allow me to introduce you to one David Vitter, Republican
senator from Louisiana, candidate for governor in that state, not exactly
known as a profile in political courage or a brave voice for the voiceless.

Like every other Republican in the Senate at the time, David Vitter
did not vote for the Affordable Care Act. But now as a candidate for
governor in a state where Republicans have refused to expand Medicaid,
blocking health coverage for an estimated 242,000 people, David Vitter of
all people says he`d consider removing the Republican roadblock and
expanding Medicaid if he becomes governor.

David Vitter is no doubt reacting to pressure that`s building up
around the Medicaid expansion, as results are being seen in states that
have taken the expansion. Both Minnesota and Kentucky, to name two
examples, have cut their uninsured rate by more than 40 percent, 40
percent. Almost half the people who didn`t have insurance in those states
before Obamacare have insurance now.

And that`s not only goods news -- that`s not the only good news on the
Obamacare front. There`s also news this week of a flood of new insurance
companies saying they want to join the Obamacare exchanges next year, with
data from 10 states showing 27 new insurers saying they will be offering
plans through the Obamacare exchanges in 2015, the second year of its

But, based on the way the program`s designed, more insurers should
mean more competition, more choice, lower premiums for patients, which is
good news. And in case you`re wondering, this is what success looks like
for Obamacare. It looks practically invisible.

It looks like a story that`s largely disappeared from cable news and
the front pages of major newspapers, an issue that is not the number one
subject of domestic political argumentation anymore, because the funny
thing about Obamacare is, the more it actually works, the less people talk
about it. And if you don`t believe me, here`s a case in point.

Tonight, FOX News had Hillary Clinton for 30 minutes across two prime-
time shows and did not ask a single question about Obamacare.

Joining me now, Wendell Potter, former head of communications for the
health insurance giant Cigna, author of "Obamacare: What`s In It For Me?"

Wendell, let`s start with the news about these 27 new insurance
companies that are going to be joining the exchanges, coming in off the
sideline. What do you make of that news?

CIGNA: Well, it doesn`t surprise me a bit, because what happened, these
big companies decided they did not want to participate at the very

Much of these were investor-owned companies and these investors don`t
really like a lot of risk. And these big companies, UnitedHealthcare in
particular, is -- they`re now jumping in because they see that there`s
plenty of opportunity there. And the government is also helping to
mitigate some of the risk.

So I think we`re going to see during this coming, this next year,
during the next open enrollment, a lot more choice and I think you will see
premiums stabilizing and not increasing as much as the right wing said it

HAYES: So there`s two ways you can view this news. One this is going
to be good for consumers, because you have more choice, more competition,
pushing down premiums. The other thing is if insurers think they can make
a buck in this market, maybe we should be skeptical that it is good for
consumers. Which of those do you think is the more accurate way of
understanding this?

POTTER: Well, I think it`s both.

I frankly think it is both, because the insurance companies do see an
opportunity here to make money. They will not get in this business -- they
have never been in this business except to make money. And now they`re
seeing that they can make money on the exchanges. So, they will stay in.
They will get in, and they will stay in.

HAYES: Do you think we`re going to see a turning point on Medicaid
expansion similar to this kind of growing thing we`re seeing in the
exchange market, more and more insurers wanting to get in? Are we going to
see more and more states opting in?

POTTER: You will. You really will.

And keep in mind the original Medicaid program, it took a few years
before all the states were in. The same thing is happening with this
Medicaid expansion. And the governors and the legislators in states that
have not expanded, they`re going to obviously look to see what is happening
in Arizona and New Jersey and some of the other states that are led by
Republican governors and seeing that it makes sense.

They`re also going to be under increasing pressure from health care
providers, hospitals in particular to expand, as you made a reference to in
North Carolina. You will be seeing that all across the country in states
that have not yet expanded, incredible pressure, economic pressure for them
to expand their Medicaid operations.

HAYES: Yes, will you explain? I think people don`t fully grasp why
it`s -- Obamacare is so bad for hospitals in states that haven`t expanded
Medicaid. What is the argument those hospitals in those states are going
to be making to lawmakers?

POTTER: Well, because if they don`t expand, they will be losing
federal revenue and they need that federal revenue to keep their doors
open. If they don`t, a lot of these companies -- a lot of these hospitals
will actually close and you will see community hospitals in particular
shutting their doors, which cannot be sustained.

And I think the political pressure on legislators and gubernatorial
candidates is going to increase, because these hospitals have considerable
clout in their communities and in the state halls.

HAYES: In terms of the 40 percent number that we have seen out of
Kentucky and Minnesota, are you surprised the numbers in those states is
that big in just one year?

POTTER: No, I don`t, because there has been such pent-up demand for

Keep in mind that, before Obamacare, many of those people couldn`t buy
coverage at any cost, at any price. So, I`m really glad to see that number
from Kentucky, because it`s where I used to live and work. And I think you
will see that also in other states as well, too.

And keep in mind, Chris, this is just six months. We`re in this for
the long haul.

HAYES: Right.

POTTER: And so I think in the next year or so, you`re going to see a
lot of that kind of progress made.

HAYES: Wendell Potter, thank you so much.

POTTER: Thank you, Chris.

HAYES: All right. Coming up, what led Tesla Motors, the electric car
company, to make a move that shocked a lot of people, a lot of business
observers? I got to ask their co-founder and he gave me his explanation.
We will bring that to you ahead.


HAYES: Quick programming note.

Next week, our "ALL IN America" series will return. We have been on
the road for weeks in Georgia, in Illinois, North Carolina, in our own
backyard, putting together stories you haven`t seen anywhere else,
including a report that reveals where some of the most segregated schools
in America are, not where you might think, plus how a deep red former
Confederate state could actually turn blue with some simple math, and the
case of a murder in Chicago that disappeared.

So, tune in all next week for that. There will be a different piece
every night you don`t want to miss.



UNIDENTIFIED MALE: Tesla CEO Elon Musk has just announced on the
company`s Web site that the company is going to be opening up all of its
patents for other automakers and others in the auto industry to use.

UNIDENTIFIED MALE: It is rare and it is bold. Tesla is sharing its
secrets, opening its patents for the world to see.

UNIDENTIFIED FEMALE: We haven`t seen this type of move from any

UNIDENTIFIED MALE: This is completely unusual when it comes to the
auto industry.


HAYES: Tesla`s decision to open up its patents is a perfect example
of both the allergy to convention this electric car company seems to have
and also the tremendous scope of its ambition.

They`re not just trying to build a car company; they`re trying to
build a new whole industry, one that would mean a shift from today`s gas
guzzlers to zero-emissions electric vehicles with massive implications for
the economy and for the climate.

Tesla is that rarest of success stories, a successful and innovative
young American automaker, with a stock price that has exploded over the
past five years, an astounding $30 billion market valuation and a claim for
selling what "Consumer Reports" considers the best car you can buy.

I had a chance to sit down with Elon Musk, the visionary behind it


HAYES: So we were doing research when we were doing a segment on
Tesla and we were going back through the archives of American car startups
that have failed.

ELON MUSK, CEO, TESLA MOTORS: Right. There`s a big archive, I`m

HAYES: Yes, and actually -- it`s a big Wikipedia page.

MUSK: Yes, absolutely.

HAYES: It was actually kind of fun.


HAYES: I was like, wow, all these dreamers that got...

MUSK: Yes, a big graveyard.

HAYES: So, why is it -- why are you guys -- how have you avoided that
fate so far? Why is Tesla working so far?

MUSK: Well, I think, you know, when you looked at the other car
companies, there wasn`t really any big technology discontinuity. There
wasn`t some sort of step change in technology that warranted the creation
of new car company in America, whereas with the advent of electric cars, I
think it`s the biggest change in automotive since the moving production

It`s a really substantial change and it does lend itself to expertise
from outside the car industry. And I think that provides an opportunity
for a company like Tesla. And, in fact, I have somewhat been surprised at
how much of a lead we have. We actually don`t want to have the lead we
have. We were hoping that other car companies would follow us faster.

HAYES: You just had this patent decision and this gets to the point
you were saying. You`re further ahead of other car companies than you
would like to be.

MUSK: Yes.

HAYES: Because there`s a certain kind of broad interest you have in
the diffusion of electric cars, right?

MUSK: Right.

HAYES: Is that what is driving your recent decision to essentially
not pursue intellectual property claims on your own patents?

MUSK: Yes.

We decided to open up the patents because we think it`s important that
there be a lot of electric cars in the world. You know, a lot of people
say, well, is this really an altruistic decision? Does altruism even
exist? No company would really do that.

But I think it`s important to bear in mind that we`re really all on
the same ship, you know, of -- being Earth. And if Tesla succeeds, but
then the sort of climate is destroyed, I`m not sure that actually helps


HAYES: Right.

MUSK: I mean, it`s sort of like, let`s say you`re on a...


HAYES: Well, A.C., you have to crank the A.C., which runs down the

MUSK: Yes. Right. It`s a self-defeating situation.

But I`m not sure what the appropriate analogy is. But a ship-based
analogy that might be appropriate here, where it`s like let`s say there`s a
bunch of people on a ship and there`s a bunch of holes in the ship. And
we`re quite good at sort of sort of bailing the water out of our section
and we have invented this nice bucket. It would be foolish of us not to
share that bucket design because, if the ship goes down, we`re going with

HAYES: Now that you are selling batteries to some other car
companies, what do you see happening in the rest of the car industry?

I mean, can you imagine that we`re going to see a slide towards kind
of battery-plus electric drivetrain or not? I mean, what do you predict
that the other car companies are going to do as this technology develops?

MUSK: Well, my observation of the car industry thus far is that, with
a few exceptions, the only electric cars that are made are driven by

You know, in other words, the governments will say, we have got to
make some number of electric cars. They will make sort of that exact
number, and no more, which is quite a small movement.

The other force I think is competition. So if they see that, well, if
they don`t make electric cars, then they`re going to lose market share,
then I think that will get them to make electric cars.

HAYES: Meaning you guys are the proof of concept from a market
perspective. And if you start making a lot of money, if you start showing
that people will buy your car, then you`re going to see the rest of the
industry flood in.

MUSK: Yes. Exactly.

So, if people are -- if consumers show that they want electric cars,
that they buy our cars and they buy our cars, instead of gasoline cars,
then I think that that makes the big manufacturers sit up and take notice
and say, well, maybe we should have a serious electric car program,
because, otherwise, Tesla is going to take away our market share. That
seems to be a good forcing point.

HAYES: How far are you from that point?

MUSK: Well, we`re pretty far from that point.


MUSK: We`re very tiny. So, last year, we did 22,000 cars. This
year, we`re aiming to do 35,000.

So, on a percentage basis, it`s quite big growth. But, considering
that there were almost 100 million cars made last year, we`re not even next
to the decimal point. So, we have got a ways to go before we even get next
to the decimal point in percentage market share, but we are doing quite
well in our particular segment.

So if you say premium sedans in the United States, we actually -- we
were the best-selling premium sedan last year in the United States in terms
of the high end, yes.


HAYES: Now, if there`s a single person best positioned to say where
we are and where we need it be on the issue of climate change, it`s Elon
Musk, who is at the forefront of the fight to rein in carbon emissions. I
asked him where we now stand, and what he said really surprised me. That`s



HAYES: You talked about when you released the patent about how
quickly we kind of need to get our act together to forestall real climate

MUSK: Right.

HAYES: And it seems to me with the political system the way that it
is, that really the only hope is just an incredible explosion innovation.

MUSK: Yes.


HAYES: How hopeful are you about that explosion of innovation? What
are the obstacles you see, given that you`re working at the frontier of
battery capacity and all this stuff?

MUSK: Yes.

I think that the biggest concern I have is the sheer size of the
industrial base that is based on our gasoline or diesel, instead of fossil

The fact that there`s two billion vehicles on the road worldwide,
there`s 100 million new gasoline cars made a year, even if all new cars
were electric, it would take 20 years to change out the fleet, and, of
course, we`re very far from all new cars being electric.

So that`s what gives me a lot of concern about the future from a
climate perspective. We`re quickly exhausting the carbon capacity of the
oceans and atmosphere, and we`re not quickly moving toward electric cars


HAYES: It`s funny. You sound more pessimistic than I would have
imagined you. Like, I would imagine that you`re professionally optimistic
because you`re doing something...


MUSK: I am optimistic. No, I`m a naturally optimistic person.

HAYES: Right. You`re doing something that -- you would have to be an
optimist to start an electric car company or to start a space company or
solar company, right?


MUSK: Yes.

HAYES: What will it take to basically have the next 10 years of, say,
solar and electric renewable energy look like the last 10 years of
smartphone development?

MUSK: I would love to say that that`s even possible.

And I would like to say it`s possible, but the thing that`s difficult
to appreciate -- well, I suppose, if you come and think about it for a
moment, maybe it`s not that hard, the -- is the sheer size of the economy
that depends on hydrocarbons. It`s truly staggering, you know, to

The number of factories that have to be bought to produce factories,
electric cars, produce solar panels, it`s enormous. You know, it`s -- if
you think of all the oil fields and the gas fields and the refineries and
you`re replacing -- you`re trying to replace that infrastructure, which is
trillions of dollars, so it would be difficult for us to move too fast.

But at the same time, I mean, if we said, like, OK, let`s go as fast
as possible, which we`re certainly not going, it would still take a long
time. So the thing that -- that`s the thing that I guess makes me a little
bit concerned -- or maybe more than a little bit concerned -- about the
future is that the vast amount of infrastructure that has to change.

HAYES: The legacy stuff that`s all just sitting there.

MUSK: Yes, it`s just so big.

HAYES: So big.

MUSK: Yes.

HAYES: Do you think we are properly -- that right now the market and
the educational system is properly allocating talent into the areas that we

Because it strikes me that right now, when Instagram sells for
billions of dollars and you can make an iPhone game app that makes a lot of
money or go sell mortgage-backed securities, that we`re not necessarily
getting people to go things like solve the really tough problems having to
do with solar engineering or battery capacity that are going to be the
thing we need to solve -- or even carbon sequestration -- to make this
problem solvable.

MUSK: Yes, I mean, I think it`s a tough thing.

The biggest problem that we have right now is that we have a breakdown
in the market system. Now, I`m ordinarily quite a big believer in the
market, because the market is just the sum of individuals` decisions. But
when there`s a breakdown in the information mechanism of the market, that`s
where things go awry.

And so because there`s no price on carbon emissions, it makes things
that are carbon-producing very rewarding, because the true price is not
being paid. So if you`re a petrochemical engineer, you can earn a
tremendous amount of money, but you really shouldn`t be earning that huge
amount of money, because you`re -- it`s -- anyway, it`s not -- the market
mechanism is broken.

It`s a classic economics problem, tragedy of the commons.

HAYES: Right, the atmosphere that we all have that...

MUSK: Yes.

You see this in international fishing stocks, where there`s no --
since no one sort of owns that particular fishing area, it will get fished
to extinction and -- because there`s no price for that. So, there`s no
price for carbon. So we do all these things that cause long-term damage.


HAYES: That`s ALL IN for this evening.


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