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All In With Chris Hayes, Friday, June 20th, 2014

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ALL IN with CHRIS HAYES
June 20, 2014

Guest: Zainab Salbi, Barak Mendelsohn, Maria Hinojosa

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

The Islamic State of Iraq and al-Sham or ISIS, the militant Sunni
group that now controls a wide swath of territory spanning from Aleppo in
Syria through northern Iraq, launched a global social media campaign today.
All around the world, supporters of the group are tweeting with the
#alleyesonisis. Messages like this one from Zambia, "May Allah give them
victory". Or this one from Pakistan, "We`re all ISIS."

If the jihadi hashtag seems like a setup for a macabre joke, it is no
laughing matter. ISIS may want to take society back to the Middle Ages,
but their use of digital and social media belongs squarely in the 21st
century. The group has proven itself to be incredibly sophisticated and
adept propagandists. And since their explosive growth in the chaos of the
Syrian civil war, they have stretched their tentacles across the globe to
draw in new recruits.

For disaffected young Muslim men around the world, videos like this
present the opportunity to join in a heroic, romantic struggle, to be part
of a real life video game. ISIS has even made direct appeals in English to
urge western Muslims to join the fight. NBC cannot independently verify
this video but the speakers are identified as British citizens.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: All my brothers living in the West, I know how you
feel in the heart, you feel depressed. The cure for the depression is
jihad.

(END VIDEO CLIP)

HAYES: And here`s one British man who left behind a wife and three
children explaining why he joined ISIS.

(BEGIN VIDEO CLIP)

ABU SUMAYYAH, IDLIB, SYRIA: I don`t miss a thing, you know? I
really, really -- I felt like I was in prison in that country and I`m here.
I feel free, you know? I can drive, I can, you know, I don`t need a
license. I don`t need insurance. I don`t need this and that.

Just to watch TV, you don`t need a TV license. You don`t -- all of
these things, you know, you feel like you`re in prison. You`re being
punished.

Here, it`s freedom. Totally freedom. I can walk around with a
Kalashnikov if I want to, with an RPG if I want to.

(END VIDEO CLIP)

HAYES: And oddly libertarian argument for waging jihad. To their
supporters and even to some of the people whose neighborhoods they have
conquered, ISIS is careful to present an image of righteousness, even
benevolence. Hence presuming trash collection in Mosul after taking it
over last week, and providing fuel to residents.

But to their enemies, ISIS is a very different propaganda aim, terror.
The black flags are no accident nor the covered faces or automatic rifles
raised in the air. That is in part why ISIS released the feature length
video the clanging of swords, showing tanks being blown up in Iraqi army
posts under attack.

It`s why they put out these grisly photos they say show the execution
of 1,700 Iraqi Shiite soldiers. Yes, 1,700 captured soldiers they say they
slaughtered.

Occasionally, the two propaganda aims of this group which has so
successfully threatened to pull Iraq apart come into conflict with each
other because the ugly truth is that ISIS does a lot of very, very
monstrous things. The victims of the monstrous things are the people
they`re supposed to be governing.

This video was posted to YouTube and caused somewhat of a scandal
within ISIS. According to al Arabiya, what you`re seeing an elderly man
being quizzed by an ISIS leader in Aleppo, Syria, about his knowledge of
Islam and Prophet Muhammad. When the old man admits his ignorance, this is
what happens.

(VIDEO CLIP PLAYS)

HAYES: According to the al Arabiya translation, the commander when
the old man says he doesn`t know, says, "I will teach you" and cocks the
gun.

After the video surfaced, ISIS actually asked that leader in Aleppo to
step down recognizing what a propaganda failure it was. And how did they
announce the firing? Via tweet, of course.

I spoke earlier with NBC chief foreign correspondent Richard Engel in
Baghdad, and I started by asking him if ISIS had been well-received in the
areas they conquered.

(BEGIN VIDEOTAPE)

RICHARD ENGEL, NBC CHIEF FOREIGN CORRESPONDENT: Generally not.
Mostly, we`re seeing refugees leaving the area they conquered. According
to the U.N., there`s about 400,000 refugees that have left the conflict
areas, but they do have some support in this country. They are getting
support from old members of the Baath Party. These were people who felt
that they were thrown out of power, along with Saddam Hussein, and then
never treated fairly by the new government and they`re gaining power from
some Sunnis who lived in Mosul and other areas, who were angry with the
government.

This government is seen and has acted in a very sectarian way over the
last several years and we spoke with refugees who were leaving Mosul. And
they said that they actually weren`t terribly opposed to ISIS, even though
they didn`t agree with them, didn`t want to live in an Islamic state. They
did think it was brutal, but they were happy that finally, somebody was
taking the fight to the Iraqi military because the Iraqi military,
according to these refugees we spoke to, treated Sunnis badly, stopped them
on the streets, would ask for bribes, would ask to see their papers and
generally just made them feel like second class citizens.

So, there is an element of Sunni disenfranchisement that these
militants are able to capitalize on, but I wouldn`t say it`s necessarily
because of their charismatic personalities.

HAYES: Well, we`ve seen ISIS wage this kind of two-prong propaganda
war. One prong is terrifying their enemies, right? Trying to cast fear
into the hearts of the government, into Shia, to try to, you know, psych
the army into running away.

At the other side is attempting to kind of tell the people that might
be under their control, you know, we`re going to be all right, we`re going
to provide services. What are perceptions of ISIS like in Baghdad as they
come south, conquering cities?

ENGEL: This city is divided like this entire country. The Shiite
community believes that they are a marauding pack of demons who are coming
here to cut their heads off. They`ve been talking about blowing up Shiite
holy sites. There`s been videos of is beheading people in front of their
families, searching out Iraqi troops, executing them in their homes.

So, here in Baghdad, if you ask any member of the armed forces, or
Shiite community, they would tell you that these are despicable barbarians.
There are some Sunnis here. They`re very concerned. They don`t want to
openly associate with ISIS, but some of them do sympathize with the
militants. If not because they like the militants, just because they don`t
like the government.

HAYES: NBC News chief foreign correspondent Richard Engel, thank you
so much.

(END VIDEOTAPE)

HAYES: Joining me now, Zainab Salbi, founder of Women for Women
International, author of "Between Two Worlds: Escape From Tyranny: Growing
Up in the Shadow of Saddam."

Zainab, of course, you are Iraqi, half Sunni, half Shia. Your family
in Iraq, how are they understanding the incursions of ISIS and the appeal
that they might have to certain segments of Iraqis.

ZAINAB SALBI, WOMEN FOR WOMEN INTERNATIONAL: Very scared. So when I
first -- as this first started taking over, everyone in Iraq, this is
family, friends, Christian, Muslims, Sunni, Shias were very, very scared.
And for the first time in my entire life, I saw them depressed, fatalistic,
maybe this is the end. Maybe we should divide the country and that`s it.

But a week later, a few days actually later when ISIS started issuing
some of these laws, you know? So, anybody who does not show up to work,
for example, ISIS said they will be lashed by 50 lashes. Virgins -- they
were doing surveys of households in Mosul and other provinces asking for
how many virgins in each household. And so, because they permitted war
sex.

HAYES: Right.

SALBI: So when they started doing these things, even the Sunni
population and the ones that I`m talking with in Iraq, were like, wait,
this is too much, and it actually end up being almost a wake-up call for
Iraqis, for the sectarianism in Iraq.

It`s almost now ISIS leaders, for example, called for a national
unity. Everyone started to call for a national unity. It is so bad that
in my opinion that it`s acting as a wake-up call for Iraqis.

HAYES: It`s interesting we have seen in other places the Taliban
which emerged in the wreckage of the long afghan civil war and was welcomed
for providing order in certain sectors. The Islamic courts in Somalia,
similar situation, a kind of failed state and they were the only order, and
then, quickly the kind of viciousness and just awfulness of living under
that rule began to manifest itself.

SALBI: Yes, and a lot of Iraqis are not talking -- they say this is
not our fundamentalism. This is not our kind of thing. It`s important to
actually note this that in Iraq, we never had that extremism. This is a
new phenomenon that was introduced in the last decade, truly.

Now, a lot of Christian population, for example, are very, very scared
right now because ISIS have burned churches in Mosul. A lot of moderate
Sunni and Shias are very scared.

Now, that does not reflect the Iraqi population but it`s a dangerous
phenomena. Fundamentalist groups usually provide humanitarian aid and
that`s how they get the loyalty of the people.

HAYES: You know, we mock the people who say, the run-up to the war,
there`s not this history of sectarian tension between Sunni and Shia. But
the fact is there wasn`t that much actually. The war created a lot of it.

SALBI: Look, there`s always Sunni/Shia issue. This is indeed a
1,400-year historical things.

HAYES: Right.

SALBI: However, it was historical suppress identity. When I was
growing up in Iraq, for example, Iraqis would say I`m an Iraqi first, then
I`m from Baghdad or whatever province, then I`m Muslim or Christian, and
then if I`m a Sunni or Shiite. It`s something we talked about when it came
down to marriage.

But never, never at school or at work, right? That identity, in other
words, it wasn`t like it disappeared.

HAYES: Salience wasn`t as high.

SALBI: Exactly. And all the precedents, it`s flipped. And that
flipping, America did contribute and introducing it.

HAYES: Yes.

SALBI: By started asking people when America first came to Iraq are
you Sunni, Shia? And papers.

HAYES: It was American kind of bureaucratic occupation that raised
the salience.

SALBI: Absolutely.

HAYES: Fascinating. Zainab Salbi from Women for Women International
-- thank you so much.

SALBI: Pleasure. Thank you.

HAYES: Jihadists like ISIS may have mastered the art of propaganda,
but some interesting PR tactics have been used on the other side of the
battle to, including by the U.S. government. And according to a report in
"The Washington Post," back in 2005, the CIA was developing an Osama bin
Laden action figure to be sold in South Asia to try and counter the al
Qaeda leader`s appeal. The toy`s face was, quote, "painted with a heat
dissolving material designed to peel off and reveal a red faced bin Laden
who looked like a demon.

Terrifying, but also maybe a little too self-defeatingly cool? The
toy was designed by the same guy who brought you G.I. Joe. CIA says the
project was discontinued shortly after the prototypes were produced.

Probably good idea since as many kids I grew up rooted for Cobra as
they did for Joe. Today in Iraq, the government is taking a fairly
heavily-handed approach to win its people`s hearts and minds with this
video airing all over Iraqi TV.

You`re seeing a demonic looking ISIS militant again with the demons
playing with snakes under the black jihadi flag until a heroic Iraqi
soldier shows up.

And in Britain, a kind of, well, apparently grassroots inoculation
against jihadi recruitment. A mysterious activist calling himself Abdullah
X put out this video to push back against jihadi recruitment of young men.

(BEGIN VIDEO CLIP)

CHARACTER: Number one, you thought of the needs of the people
especially women and children in Syria? Number two, if you have, do you
genuinely think going out there to fight and potentially be killed will
affect those suffering in a positive way?

(END VIDEO CLIP)

HAYES: Joining me now is Barak Mendelsohn, he`s associate professor
of political science at Haverford College.

Professor Mendelsohn, I think a lot of people are surprised when they
hear news that ISIS was having a social media day of action. ISIS has sort
of distinguished itself by being at the cutting edge of both social media
and propaganda as this conflict in Syria and now Iraq has unfolded. Isn`t
that true?

BARAK MENDELSOHN, HAVERFORD COLLEGE: It is. ISIS is showing itself
as the next generation of jihadis. Al Qaeda before that adopted new
technologies and as new technologies advance, we see ISIS taking over the
mantle of al Qaeda in terms of technology innovation, adopting social media
and making significant use and very successful use of social media.

HAYES: I have to say, I was really fascinated -- I was horrified by
the video. I`ve watched it three, four times of the Aleppo commander with
the old man. It makes your blood run cold. And then I was fascinated by
the weird kind of almost bureaucratic response or CYA response from ISIS,
which is oh, you`re fired, battle Aleppo commander.

How common is that sort of thing?

MENDELSOHN: ISIS is trying to battle the image, identity of the
image. It`s trying to show that it can govern and that it`s not such a
negative, such a brutal organization, even though in reality, of course, it
is. And it has to deal with commanders in the field that overreach and so
even the basics of ISIS is being surpassed by overly enthusiastic
commanders or soldiers in the field and ISIS is very aware of the need to
maintain a better, a more positive image.

They saw the damage, the image, how we affected the last effort in
Iraq in 2006, 2007. And, therefore, they tried to show that they can
handle those rogue elements.

HAYES: One of the things that appears to distinguish ISIS from al
Qaeda is both the sort of explicit territorial ambition and the fact
they`re now controlling territory and aspire to something like a nation
state. They call it a caliphate. Do you think they are capable of it?
Can they hold the territory that they have been taking?

MENDELSOHN: I`m not sure that they can hold the territory. It helps
them that the Shiite government, Iraqi government, at this point, the
military, is incapable of making much inroads and take back some of the --
a lot of the territory that is conquered. But overall, if ISIS will hold
that, we`re now going to face the problem of governance that were problems
for them in the past. They`re trying to rely now on the alliance they had
with former Saddam, Baathists groups and with the Sunni tribes, this way
they hope that they will be able to hold the territory.

But the inherent self-destruction force of ISIS is going to resurface
and it`s going to be a very serious problem for them in holding that
ground.

HAYES: In my experience, a lot of hopped up men with young guns is
not a recipe for good governance.

Barak Mendelsohn, thank you very much.

MENDELSOHN: Thank you.

HAYES: Coming up, immigration crisis Republicans are all too happy to
blame on President Obama.

(BEGIN VIDEO CLIP)

GOV. RICK PERRY (R), TEXAS: I have been haranguing, bringing to the
attention of, flagging issues on that border for multiple years. I am
deeply frustrated and disappointed in the administration`s response.

(END VIDEO CLIP)

HAYES: Rick Perry may be frustrated but the Republican Party is far
from blameless in this whole thing. I will tell you why, ahead.

(COMMERCIAL BREAK)

HAYES: All right. Remember that app we told you about earlier in the
week?

(BEGIN VIDEO CLIP)

HAYES: You get your friends on this app, and when you want to send
them a message, all you have to do is press a button and that message that
they get sent is, get ready -- yo. Listen.

VOICE: Yo.

HAYES: Just yo.

VOICE: Yo.

HAYES: Like that.

(END VIDEO CLIP)

HAYES: Well, I hope you didn`t download it because it probably
compromised your data. Our bad. Revealed today the app has very serious
security flaws. Apparently, it could easily be hacked exposing, you know,
all of its users` phone numbers. Yo`s founder acknowledges the app is
having issues saying, quote, "Some of the stuff has been fixed and some
we`re working on. We`re taking this seriously."

Side note, thank God, that phone wasn`t mine, it was one of my senior
producers. She reports she`s been totally inundated with yos all week.
Sorry, Tina.

We`ll be right back.

(COMMERCIAL BREAK)

HAYES: The White House now says U.S. authorities have apprehended
52,000 unaccompanied children trying to cross into the U.S. in just the
last nine months.

If you want a sense of how dire the humanitarian crisis on our border
is, take a look at the chart. These blue bars, those are number of beds
Health and Human Services Department has available for unaccompanied
undocumented children who are turned over to HHS.

And the tall bars, those are the number of undocumented children
border patrol is actually turning over to HHS custody. And the gap, the
distance between those two, is presumably filled with kids in situations
like this, sleeping on cots or mattresses, or the floor, crammed into
detention facilities at numbers far beyond their capacity.

So dire is the situation that the first lady of Honduras announced
this week she`ll personally fly up to the U.S. to attempt to collect the
13,000 Honduran children who have come to the U.S. by way of Mexico.

Meanwhile, Vice President Biden is in Guatemala to meet with that
country`s president as well as the president of El Salvador, and officials
from Honduras and Mexico to address the crisis. The White House announced
plans to step up detention and deportation today, including plans to open
more detention centers that can house families of children, expanding the
use of electronic ankle bracelets to track migrants once they`re released,
and sending more immigration officers and judges to the Rio Grande Valley
in Texas where the biggest influx is.

The Obama administration is struggling to take a bureaucracy that is
not equipped to be a massive child care agency, to essentially convert it
into a child welfare organization on the fly. But more detention centers
that can house children is not a plan that is sitting well with
humanitarian groups. An official with the border network for human rights
telling "The Nation," quote, "It bothers us that they see detention as the
only option. It doesn`t matter how many more beds they have, this will
continue to happen. We need policy solutions, not just infrastructure."

Joining me now, Maria Hinojosa. She`s anchor and executive producer
of NPR Latino USA.

And, Maria, you`ve been doing some reporting on this. You`ve got a
big new report out. What have you -- what have you found?

MARIA HINOJOSA, NPR LATINO USA: You know what? Actually, Chris,
we`ve been reporting on this for -- I don`t know, let`s say, 15, 16 years
on Latino USA. So, we`ve known about this crisis. We`ve been talking
about it. Unfortunately, you know, now it has gotten to these elevated
proportions.

But the story that we have on the air this week is actually with a
whistleblower who has direct contact. This person works in a place that
houses these children. And our whistleblower basically said that what --
and we`re going to call this person Kay -- that what Kay expected when she
was, well, when she was talking to these kids, we didn`t want to reveal her
gender, but I just did, she expected that these children would be talking
about the trauma of making the trip, of leaving their home.

HAYES: Right.

HINOJOSA: These are children, again.

HAYES: Yes.

HINOJOSA: In fact, what`s happening is that Kay says that these
children, the trauma really begins when they get to the United States.

So that what they`re traumatized about is the conditions in which
they`re being held. She revealed --

HAYES: The trauma isn`t the journey, which we all think is, imagine
would be traumatic.

HINOJOSA: It`s called La Bestia. The train ride up is called La
Bestia, the beast. So that`s pretty traumatic. Everybody knows the
possibilities of assault.

Kay said that one of the children actually witnessed a man being
mangled by the railroads. And still said that the most traumatic thing has
been the detention in the United States.

HAYES: OK. So what`s -- I mean, I look at this and I think, well,
this is a disaster. Everyone -- it`s become a political football. I also
think, OK, if you wave the magic wand and made Chris Hayes as the head of
DHS today, I no freaking idea what I would do.

I mean, what do you do? You got these kids. You`re not running a
child welfare organization. Like, what do you do?

HINOJOSA: This is what happens when you don`t have leadership. This
is what happens. It`s not a crisis that happens overnight.

So you`re right. Now everybody is like, what do we do? It`s like
we`ve been trying to talk about this, report about this for a long time.
There`s this notion if we just build more detention centers, if we just
build bigger walls, just stall and don`t do anything --

HAYES: Or increase border security. This is not a border security
problem.

HINOJOSA: Exactly. In fact, Chris, the point I wanted to get at in
terms of what our whistleblower revealed, is the children talk about being
placed and housed in something they call (SPEAKING SPANISH) means the
icebox.

Children who are being held for days, Kay said, for at least a week at
a time, in conditions where they said it`s like -- you know when we go into
the icebox here where we`re being held, the refrigerator, it`s like that
for seven days without being able to get out. Those are the conditions
that our government is housing these children.

So, the question is what does this mean that we have now in our
country allowed ourselves to get to this point? That somehow children are
seen as invaders and have to be sent back or put into detention centers.
What crime have they committed? I mean, lost in the -- there`s so many --

HAYES: Right. We have a bureaucracy that has been militarized and
has come to view this as sort of -- if not a criminal matter, at least a
sort of law-breaking matter as opposed to a humanitarian matter, and the
bureaucracy is designed to deal with it in that case and now, it`s got 12-
year-olds and 6-year-olds and the bureaucracy does what the bureaucracy
does.

HINOJOSA: And how do we get to a point where we can begin to talk
about what all this means? I mean, we have -- that`s why the fact this is
a crisis and everybody is so upset is that -- actually, this has been going
on for a long time.

In my "Frontline" on PBS, we uncovered sexual abuse and assault in
numbers that were skyrocketing, and yet, what happened? It hasn`t changed.

As journalists, you know, this is one of the greatest untold stories.
We`re able to do it with whistleblowers. We can`t get into these detention
centers to see what`s really going on.

HAYES: Maria Hinojosa, that report can be found on Latino USA, on the
Web -- thank you so much.

HINOJOSA: Thank you, Chris.

HAYES: Coming up, a sneak peek at our next installment of our "All in
America" series. We`ve been in the road for weeks, in Georgia, Illinois,
North Carolina, even in our own backyard, putting together stories you
haven`t seen anywhere else. And yes, I just teased a tease because it`s
that good. Stick around.

(COMMERCIAL BREAK)

HAYES: All next week, we will be bringing you some original stories
in the next installment of our series "ALL IN America."

This week`s theme, behind the color line. It began as an in-depth
look into what segregation and desegregation and integration looks like in
this country 60 years after Brown vs. Board of Education. And what we
found surprised us at every turn. We went to Georgia, where black
Democrats are actively recruiting white people to join the party.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: We have got to convince these black legislators
they have got to give up something. Not everything. They don`t have to
give up all their seats. But they have to give up something and say I`m
going to share this. I`m in a power position. Even though I`m in a
minority, I`m in a power position, and I can afford to give this up.

HAYES: And by share this, you mean share some black voters to get
white -- white Democrats elected.

UNIDENTIFIED MALE: Absolutely, yes, exactly so.

(END VIDEO CLIP)

HAYES: We went to a school in Brooklyn, New York, that`s part of one
of the most segregated school systems in the country and found a school
trying to reverse that.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: I meet people and they, oh, you`re the principal
at (INAUDIBLE) I have heard that`s a really great school.

But if you had asked them a year ago, they would have said, I had
heard that was a really bad school. And we`re the same school that we were
a year ago, with the exception of 10 students.

(END VIDEO CLIP)

HAYES: Went to North Carolina to see how the color line is being
blurred, thanks to the Moral Monday movement.

(BEGIN VIDEO CLIP)

HAYES: You a Democrat or Republican?

ADAM O`NEAL (R), MAYOR OF BELHAVEN, NORTH CAROLINA: Republican.

HAYES: Lifelong?

O`NEAL: All my life.

HAYES: You ever thought you would be working with the president of
NAACP from North Carolina?

O`NEAL: No, no, I never did. We don`t agree on all the issues, but
on Medicaid expansion, we do agree.

HAYES: So this is the great the great dream of every social justice
organizer in the South for centuries.

REV. DR. WILLIAM BARBER, PRESIDENT, NORTH CAROLINA NAACP: Right.

HAYES: Has been building a cross-racial coalition.

BARBER: When we have done it, the South has changed and changed a
nation.

(END VIDEO CLIP)

HAYES: We also found a state where reparations are actually happening
for victims of forced sterilization, North Carolina.

(BEGIN VIDEO CLIP)

JOHN RAILEY, "WINSTON-SALEM JOURNAL": The North Carolina Eugenics
Board for 45 years from 1929 through 1974 ran one of the most aggressive
forced sterilization programs in the country.

JANICE BLACK, VICTIM: When I woke up, I was all (INAUDIBLE) up from
the waist down.

UNIDENTIFIED FEMALE: They labeled us as poor people, uneducated,
black.

PAUL STAM (R), NORTH CAROLINA STATE SENATOR: I thought it was a
simple matter of justice. They had been physically harmed, emotionally
harmed, and never been compensated.

(END VIDEO CLIP)

HAYES: And we went to Chicago TO take an in-depth look at race,
crime, and crime statistics.

(BEGIN VIDEO CLIP)

DAVID BERNSTEIN, "CHICAGO": We were told that by officers who were
under enormous pressure to try to downgrade crime.

NOAH ISACKSON, "CHICAGO": Some of the victims` families, they had the
death certificate that said homicide. So they believed that the police
department was investigating it as a homicide, and that our reporting found
that, no, they were death investigations.

UNIDENTIFIED MALE: That`s not just right.

ALICE GROVES, MOTHER: The only thing want them to do, put it back as
a homicide and get back on their job. Reclassify that and get back on
their job.

SCOTT WAGUESPACK, CHICAGO ALDERMAN: I think what happened was they
started playing with the numbers in the way they were keeping the stats.

HAYES: Do you have full faith that these statistics, they are not
being juked?

RAHM EMANUEL (D), MAYOR OF CHICAGO: Yes, absolutely.

(END VIDEO CLIP)

HAYES: That is just some of what we will be looking at all next week
on "ALL IN America: Behind the Color Line" right here every night at 8:00
p.m. You do not want to miss it.

(COMMERCIAL BREAK)

HAYES: Today, the debate over Medicaid expansion in Virginia just
went nuclear. Governor Terry McAuliffe said he`s moving forward with
Medicaid expansion in the face of a Republican-backed budget provision that
bars the state from expanding Medicaid.

(BEGIN VIDEO CLIP)

GOV. TERRY MCAULIFFE (D), VIRGINIA: It is unconscionable that one of
the wealthiest states in one of the wealthiest nations on the globe is not
providing care for their citizens.

And I remind everybody this is care that has already been paid for by
Virginia citizens. Providing health care to people who are sick is a moral
imperative. Let me be crystal-clear. I am moving forward to get health
care for our Virginia citizens.

Secretary Hazel will have a plan on my desk no later than September 1
of this year to tailor how we move forward with health care in the face of
the demagoguery, the lies, the fear and cowardice that have gripped this
debate for far too long.

(END VIDEO CLIP)

HAYES: Governor McAuliffe, who campaigned on expanding Medicaid, said
Republicans have refused each and every compromise and he is losing his
line-item veto power to kill the provision that would keep the state from
expanding health care.

Virginia would be, if McAuliffe succeeds, only the third state out of
15 Southern states to expand Medicaid. It`s unclear whether McAuliffe
actually has the legal authority to do this. McAuliffe pointedly said he
has several options available and the state attorney`s general office had
been consulted on -- quote -- "everything that we have done."

But Republicans are promising a fight. The House GOP leader said in a
statement: "We are prepared to challenge this blatant executive overreach
through all available avenues, including the court system."

It`s guaranteed to be a nasty, nasty battle to the end.

And joining me now is state Senator Donald McEachin. He`s Virginia
Senate Democratic Caucus chair.

And, Senator, can the governor actually do what he essentially
promised he would do today, which is unilaterally through the power of his
office expand Medicaid in your state?

DONALD MCEACHIN (D), VIRGINIA STATE SENATOR: That`s not quite what he
said, but absolutely.

He can get Medicaid expanded in Virginia. It`s a great day to be a
Virginian. And I have never been prouder. And I`m very proud of my
governor.

HAYES: OK. So, how does he do it? The Republicans just passed a
budget out of both houses, if I understand correctly, explicitly barring
it. He has a line-item veto power conferred in Virginia on the governor.

But vetoing that prohibition is not the same as accepting it, is it?
What does he actually do here? What is his next move?

MCEACHIN: Well, I do know some of the things that he`s thinking
about, but I don`t want to put him in a box. He`s got a lot of options.

D.C., Washington, D.C., will do just about anything that he wants them
to do in terms of how they deliver the money. We have public/private
partnerships here that can be formed with insurance companies. That
legislation is already on the books. So there are a myriad of ways the
governor can go forward.

Which way he picks, I`m not sure which way he`s going right now. But
trust me when I tell you, if Terry McAuliffe says he`s going to do
something, he`s going to do it. We`re going to get those 400,000 souls in
Virginia who don`t have any health insurance, who go to work every day but
don`t have health insurance, we`re going to get them the help they need.

HAYES: Are you surprised it`s come to this?

MCEACHIN: I`m sad it`s come to this, but, you know, it`s just like
the governor said. We offered them alternative after alternative. We had
a bipartisan plan in the Senate.

The Republican leadership in the House just refused to two go along.
And this is what it`s come to.

HAYES: I will let you get that in there, state Senator.

Do you think that there`s any way to...

MCEACHIN: I`m not hearing anything.

HAYES: Can we get that in there? We got that?

Do you think there`s any way to pull back from the brink here? I
mean, are Republicans essentially implacably opposed to this?

(CROSSTALK)

MCEACHIN: I`m sorry, Chris, can you repeat your question?

HAYES: Yes. Yes. Is there a way to get Republicans to come around
on this? Or is this just going to be a battle to the end?

(CROSSTALK)

MCEACHIN: I don`t know.

If I were them, in the face of a veto that`s going to be sustained, I
would try to negotiate with something -- something with the governor now,
but, given their history to date, and, by the way, given the loss of Eric
Cantor, which has spooked every Republican officeholder in Virginia, I
doubt that they`re going to do that.

HAYES: Has that really had a profound effect, the Cantor loss?

MCEACHIN: I apologize, Chris. My earpiece isn`t functioning very
well.

HAYES: OK. OK. Well, thank you, Senator. We`re going to go. Sorry
for the audio trouble.

(CROSSTALK)

MCEACHIN: Thank you for having me.

HAYES: Really appreciate it.

Coming up: Republicans may have found their secret weapon for 2016.
I will tell you what it is ahead.

(COMMERCIAL BREAK)

HAYES: Coming up, the GOP donor class is freaking out, and like
someone still reeling from a fresh breakup, they`re starting to drunk-text
their ex.

More on that ahead.

(COMMERCIAL BREAK)

HAYES: Well, it`s been a tough time lately for the former favorites
of the Republican 2016 field.

New Jersey Governor Chris Christie, once perhaps leading contender for
the nomination, severely wounded by the Bridgegate scandal. Former
Virginia Governor Bob McDonnell, at one time a rising star, preparing for a
trial after having been indicted on corruption charges.

Wisconsin Governor Scott Walker, believed by prosecutors to have been
at the center of a -- quote -- "criminal scheme" to violate election laws.

Mike Huckabee and Rick Santorum, speaking at yesterday`s sad, sad
anti-gay marriage rally in Washington, which attracted less than 2,000
people and felt like a funeral ceremony for an outdated world view.

Indeed, what had once been billed as a Republican Party`s deep bench
of rising stars for 2016 is starting to look, well, more like a one-legged
stool.

But there is a man who might just be the GOP`s great hope for 2016.
Let me tell you his resume. He`s a successful businessman, a proven
leader, former governor of a blue state, incredible fund-raising acumen,
beautiful family. This guy has it all. And his name is Willard Mitt
Romney.

(BEGIN VIDEO CLIP)

MITT ROMNEY (R), FORMER PRESIDENTIAL CANDIDATE: Hey, I get to be up
here. Come on. Who`s got your camera, though? Who let the dogs out?
Who, who. Thanks, guys.

(END VIDEO CLIP)

HAYES: There is, I kid you not, a groundswell of elite support right
now for Mitt Romney to throw his hat in the ring in the 2016 presidential
race.

At the big shot donor summit hosted by none other than Romney,
himself, last week, "The Washington Post" reported there was a notable
longing for Romney to run against, which Romney stoked with a campaign-
style speech, deeming the -- quote -- "Obama/Biden/Hillary Clinton foreign
policy" a monumental bust.

Romney staunchly denies he`s going to run a third time, but with
Republicans, particularly the Republican donor class, struggling to settle
on a viable candidate, there`s an increasing sense that Romney may be the
best they have got.

A poll released yesterday showing Romney as the leading GOP
presidential candidate in New Hampshire, and on FOX Business a few weeks
ago, Neil Cavuto had a message for the skeptics.

(BEGIN VIDEO CLIP)

NEIL CAVUTO, FOX NEWS:rMD-BO_ Now, before you dismiss what I said then
and what I`m telling you tonight, do remember this. Ronald Reagan tried
three times and succeeded on his third venture.

(END VIDEO CLIP)

HAYES: Fair point.

Joining me now, MSNBC contributor Josh Barro, national correspondent
for "The New York Times," Kellyanne Conway, president and CEO of the
polling company WomanTrend, and Philip Klein, senior Washington writer at
"The Washington Examiner."

Kelly, let me start with you.

As someone I guess who had their pulse to a certain extent on the
public opinion of the Republican base, is there any base appetite for a
Mitt Romney 2016 run?

KELLYANNE CONWAY, REPUBLICAN POLLSTER: There`s a base appetite for
full free market, let it all hang out, competitive race this time.

So just canonizing the next in line is not going to work. And,
fortunately, this time, Chris, there is no next in line. So I think you`re
going to see many people running in the Republican field. As for Romney`s
appeal, I think there are a couple things that are serious there.

One is, this man raised a boatload of money. And anybody who wants to
be competitive in 2016 will need to do that. So, of course, if you`re
invited to his donor summit, it`s a great idea to be a part of that.

(CROSSTALK)

HAYES: That`s what I was thinking. I was thinking, oh, wow, you host
a donor summit and the article that comes out of it is that the donors that
you hosted want you to run for president. I see how this works.

CONWAY: It is a little circular, but, seriously speaking, there is a
hunger to sort of get this on with and figure out who the nominee will be,
but that`s where the grassroots will have their say.

I think they`re a little bit tired of this fiction of electability.
Who can win? They`re asking who can lead, not who can win. And
electability doesn`t really work, does it? In the end, we didn`t have
presidents Dole or McCain or Romney.

And so I do think there`s -- and I just end on this. He won the
nomination, and so somebody who wins the nomination has a thing or two to
tell you about organization, about policy, about how to win. So there is
an attraction there. And I also think some of this is a referendum on the
current state of affairs. Your own poll says 37 percent approve of
President Obama`s handling of foreign affairs. So there`s a little bit of
buyer`s remorse for some people.

HAYES: Yes. I think the foreign affairs -- it was interesting to me
that Romney focused on foreign affairs, because I think that`s something
that matters a lot to the donor class and very little traditionally to non-
donor-class voters. There`s a big gap in the salience.

And to me, this really is, Josh, largely a donor-class-driven thing.
But it`s a reminder that when it comes to presidential nominations in the
Republican Party, the donor class matters a whole heck of a lot.

JOSH BARRO, MSNBC CONTRIBUTOR: The donor class does matter a lot.

But, remember, the last time the Republican Party renominated its
losing nominee for president was Richard Nixon in 1968. So, we`re looking
back a long way to think about them doing that.

HAYES: Right. Well, he did pretty well.

(CROSSTALK)

BARRO: Well, he just barely won the 1968 election.

HAYES: That`s true.

BARRO: But I think, you know, when you think about the foreign policy
thing, not only does it not really matter, I think, to the voter base, but
I think actually the Romney position is probably a liability right now.

I think, if you look in 2004 and 2008, a hawkish position was an asset
in the Republican primary. Voters may not have cared about it as much as
the donors did, but they wanted something who was for an interventionist
foreign policy.

HAYES: Strong.

BARRO: Now I think there`s actually -- on balance, Republicans are
not saying in polls they want us to go back into Iraq. They`re not lining
up with the Lindsey Graham/John McCain position.

But the people who are looking for the big GOP money, people like
Marco Rubio, are really going all out for that, as is Mitt Romney right
now.

HAYES: Yes.

Well, this has always struck me as one of the defining features --
actually a defining feature in the Republican -- in the Democratic Party,
to be honest. Just go back to that 2002 Iraq vote. And look at, you know,
the base of the Democratic Party and how their elected representatives
voted.

But there`s a big division, I feel, right now in the Republican Party
between the appetite for foreign intervention among the kinds of people
that get invited to a Mitt Romney donor summit and the kinds of folks that
are going to be showing up at an Iowa caucus.

PHILIP KLEIN, "WASHINGTON EXAMINER": Well, I think there`s that this
misperception that the divide is some clear intervention or non-
intervention divide.

I think that`s kind of a relic of the Iraq war debate. What you have
seen during the Obama era, for instance, is that you have seen a split
among people that were somehow considered the hawks. So, for instance,
John Bolton, who was considered this uber-hawk and mistakenly considered a
neocon, who supported the Iraq war, has been against going into Iraq.

He was against intervening in Syria. He was much more skeptical of
the Arab spring than what were considered neocons or the McCain class. So
I think Ted Cruz a few months ago was trying to get at this, how it`s not
just this dynamic that it`s John McCain vs. Rand Paul and you`re on one
side or the other.

HAYES: But it does always strike me, when I have had occasion to
mingle, interview, be around the, say, Ken Langones of the world -- he`s
the Home Depot CEO, he`s a big kind of mover and shaker in the Republican
donor circles -- that there`s a certain -- you know, these are people that
kind of came of age in Reagan period and they have this appetite for kind
of Reaganesque foreign policy that`s muscular, if nothing else.

And there is a kind of war-weariness among the base, and I wonder
sometimes if those come into tension with each other, Kellyanne.

CONWAY: Well, I think that there`s room for all of those views, and
the fact is that I actually think instead of playing the blame game, as
many are doing these days with respect to Iraq, and whether to two back in
or not, looking at the polls, which is my stock and trade, many Americans
do not think we belong back in Iraq.

(CROSSTALK)

BARRO: No, it`s about...

(CROSSTALK)

CONWAY: They wonder about -- and it`s a pretty tripartisan number at
this point, which is very telling, Chris.

And since Phil mentioned Rand Paul, I think 2016 is going to be a huge
test on how much his emerging foreign policy views have weight among the
base and among young people.

HAYES: I totally agree. That`s the thing I`m really looking most for
in that.

CONWAY: I think it`s a real crossover appeal there frankly, and it`s
going to be a big test. And I think just dismissing him as non-
interventionist or an isolationist is really silly. Listen to what he`s
saying. And he`s reflecting a lot of what people are saying.

(CROSSTALK)

HAYES: Coming up, much like the 2016 race, Republicans seem content
to stick with the same old/same old for their leadership in the House.
Philip Klein wrote a scathing column about it. We will talk about that and
I will ask him about it next.

(COMMERCIAL BREAK)

HAYES: All right. So, yesterday, House Republicans had to elect
their new majority leader to replace Eric Cantor in the wake of his
stunning upset loss.

And who did they choose in the wake of the stunning rebuke from
grassroots conservatives? A guy by the name of Kevin McCarthy, who,
according to the American Conservative Union, is to the left of Eric
Cantor.

Philip Klein of "The Washington Examiner," you wrote a column about
how perverse and bizarre this was as an ending to this whole saga. What do
you make of it?

KLEIN: Yes.

I mean, like I said, it`s just the height of absurdity, because you
basically -- people sort of agreed that the defeat of Eric Cantor was
driven by this grassroots rebellion against the leadership that had become
out of touch.

Then Eric Cantor steps aside as majority leader, and Republicans pick
his handpicked successor, who`s to the left of him on all these issues.
And I have been racking my brain to try to think of a parallel on the left,
and the closest I can come up with is maybe in 2006, when Joe Lieberman
lost the Democratic primary on the Iraq war, if Democrats would have
somehow rallied around some even more pro-war candidate.

I mean, it`s just very bizarre.

(CROSSTALK)

HAYES: What they ended up doing was rallying around -- actually, the
deep parallel is that they rallied around Joe Lieberman, himself, running
on a new political party he created to get Joe Lieberman reelected.

And a lot of prominent Democrats rallied for him.

Josh, how do you make sense of this?

BARRO: Well, so I think it`s a couple of things.

One is that almost nobody raised their hand to oppose Kevin McCarthy.
There are a lot of serious Tea Party conservatives in the House. They
could have run for majority leader. They didn`t. He had this one kind of
token opposition from Raul Labrador. But the thing is, if you`re majority
leader, you`re structurally going to end up doing things that annoy the Tea
Party.

HAYES: Exactly. You have to in the matter of the definition of your
job.

BARRO: Yes. Some Republicans have basically sold Tea Party
conservatives this line that just by saying no, no, no, we can force a
Democratic Senate and a Democratic president to impose whatever policy
agenda we want.

That doesn`t work. If you`re a majority leader, part of your job is
finding a way to get a debt ceiling increase through the Republican House.

HAYES: Right. Right.

BARRO: And so if you become majority leader, you end up getting
branded as a sellout, just like Eric Cantor did, and I think they didn`t
want to take that risk.

HAYES: Kellyanne, I was particularly interested by the fact that the
one up -- everyone said a lot of people analyzed the Brat upset as largely
having to do with comprehensive immigration reform or at least that played
a large factor.

And then you have Kevin McCarthy, who is from California, whose record
on this has been in the left part of the House Republican Caucus, which is
all relative, and Raul Labrador, who was his only opponent, who had been
one of the original kind of members that stepped forward in the Republican
Party to favor comprehensive immigration reform.

CONWAY: Well, there`s no question that David Brat, himself, Chris,
made immigration a huge issue, in that Leader Cantor had responded with ads
that probably were overly negative and overly wrought and a lot of mail.

But I think Cantor has been incredibly gracious in his loss. I don`t
remember a more gracious leader in modern political history.

HAYES: Yes, I agree.

CONWAY: He does not attack the Tea Parties and helped David Brat get
elected. And he stepped aside.

How many people do that? You usually can`t get rid of them. They
have nine lives in politics. But in terms of McCarthy, I listened to him
speak at the Faith and Freedom Coalition. And he got a good response from
that otherwise grassrootsy-type of audience.

And I think they`re going to be curious to see what he can do. Look,
what Josh said is absolutely correct. Red state Republicans could have
run. But they didn`t. Raul Labrador should be credited for putting his
hat in the ring. But if you show up, you win.

(CROSSTALK)

KLEIN: Well, if I can jump in.

HAYES: Yes, Philip, please.

KLEIN: The one thing that I would sort of say in their defense is
that leadership set the election eight days after Cantor dropped out.

So, basically, there wasn`t much time to have a challenge.

HAYES: To like build -- right, exactly, to build the infrastructure
for a serious challenge.

Josh Barro, Kellyanne Conway, and Philip Klein, thank you all.

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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